power system master plan 2016 - think blue data

Final Report

Power System Master Plan 2016

Summary

Supported by

Japan International Cooperation Agency (JICA)

Tokyo Electric Power Services Co., Ltd. Tokyo Electric Power Company Holdings, Inc.

Power Division Ministry of Power, Energy and Mineral Resources

Government of the People’s Republic of Bangladesh

September 2016


Final Report

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Contents

Chapter 1 PSMP2016 Summary ..................................................................................................... 1-1

1.1 Abstract ........................................................................................................................................... 1-1

1.2 Background and Purpose ................................................................................................................ 1-1

1.3 Vision Paper ................................................................................................................................... 1-3

1.4 Policy Vision .................................................................................................................................. 1-4

1.4.1 PSMP2016 Objective .............................................................................................................. 1-4

1.4.2 Five Viewpoints of PSMP2016 ............................................................................................... 1-5

1.4.3 Importance of Contribution and Responsibility to the International Community ................... 1-6

1.5 Practical Vision ............................................................................................................................... 1-8

1.5.1 Relationships between the Five Key Viewpoints and the Master Plan Investigation Items .... 1-8

1.5.2 Methodologies for this Study .................................................................................................. 1-9

1.5.3 Scope of work ........................................................................................................................ 1-12

1.5.4 Survey Implementation Feamework ...................................................................................... 1-14

1.5.5 JICA Study Team ................................................................................................................... 1-16

1.5.6 Past Activities ........................................................................................................................ 1-17

1.6 Focal points .................................................................................................................................. 1-21

1.6.1 PSMP 2010 Review ............................................................................................................... 1-21

1.6.2 Economic Development Policy ............................................................................................. 1-25

1.6.3 Primary Energy ...................................................................................................................... 1-27

1.6.4 Natural Gas (Domestic) ......................................................................................................... 1-30

1.6.5 Natural Gas (LNG Imports) ................................................................................................... 1-33

1.6.6 Coal........................................................................................................................................ 1-35

1.6.7 Oil and LPG ........................................................................................................................... 1-38

1.6.8 Power Development Plan ...................................................................................................... 1-39

1.6.9 Hydropower development ..................................................................................................... 1-57

1.6.10 Renewable Energy ............................................................................................................... 1-61

1.6.11 Power Imports ...................................................................................................................... 1-63

1.6.12 Nuclear Power ..................................................................................................................... 1-66

1.6.13 Power System Plan .............................................................................................................. 1-72

1.6.14 Improvement of Power Quality ........................................................................................... 1-77

1.6.15 O&M Legal Framework ...................................................................................................... 1-84

1.6.16 Thermal Power Plant O&M ................................................................................................. 1-87

1.6.17 Tariff Policy ......................................................................................................................... 1-93

1.7 Road-map ................................................................................................................................... 1-100

Chapter 2 Recommendations on the Implementation & Monitoring of the Master Plan ......... 2-1

2.1 Capacity building for master plan revision .................................................................................... 2-1

2.1.1 Collaboration and Cooperation between Organizations .......................................................... 2-1

2.1.2 Periodical Rolling Revision of the Milestone Plan.................................................................. 2-1

2.1.3 Strengthening of integrated statistical processing functions.................................................... 2-2

2.1.4 Introduction of Key Performance Indicators ........................................................................... 2-2

2.2 Measures to Facilitate Improvement of Investment Climate .......................................................... 2-3


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2.2.1 Outline ..................................................................................................................................... 2-3

2.2.2 Project Implementation Structure ............................................................................................ 2-3

2.2.3 Risks directly concerned with the Government ....................................................................... 2-4

2.2.4 Risks to be controlled mainly by contractors .......................................................................... 2-5

2.2.5 Recommendations for Improvement ....................................................................................... 2-5

2.3 Economic Development ................................................................................................................. 2-6

2.4 Domestic Natural Gas [Gas] ........................................................................................................... 2-7

2.5 LNG Import [Gas] ........................................................................................................................ 2-10

2.6 Renewable Energy [Introduction of energy storage technology] ................................................. 2-12

2.7 Power System Plan ....................................................................................................................... 2-14

2.8 O&M Legal Framework [O&M] .................................................................................................. 2-15

2.9 Thermal Power Plant O&M [O&M] ............................................................................................ 2-16

2.10 Tariff policy ................................................................................................................................ 2-20

2.11 Realization Of Low Energy Consumption Society .................................................................... 2-20

2.11.1 New Technologies for Power Generation with Different Energy Sources .......................... 2-20

2.11.2 New technologies in the electric power infrastructure sector .............................................. 2-21

2.11.3 Responsible Energy Consumption and Development of Bangladesh .................................. 2-22


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List of Tables

Page

Table 1-1 Link between PSMP2016 and the SDGs .............................................................................. 1-7

Table 1-2 Contents of the Study ......................................................................................................... 1-12

Table 1-3 PSMP2010 Review (Economic Development) .................................................................. 1-21

Table 1-4 PSMP2010 Review (Coal Supply) ..................................................................................... 1-22

Table 1-5 PSMP2010 Review (Gas Supply) ...................................................................................... 1-23

Table 1-6 Projection of GDP and GDP per capita up to 2041 ............................................................ 1-25

Table 1-7 Projection of Primary Energy Supply – Scenario 3 ............................................................ 1-29

Table 1-8 3E Evaluation Results of Each Power Development Scenario .......................................... 1-53

Table 1-9 3E Evaluation Results of Each Power Development Scenario .......................................... 1-54

Table 1-10 Renewable Energy Potential in Bangladesh ..................................................................... 1-61

Table 1-11 Electrification Rate Calculation Details by Power Division ............................................ 1-73

Table 1-12 Supply Trip Amount and Factors Which Should Be Considered in Each Year ................ 1-82

Table 1-13 Problems in Organizational Resources ............................................................................. 1-88

Table 1-14 Solution Proposals ............................................................................................................ 1-89

Table 1-15 O&M Solution Proposals and Implementation Plans ....................................................... 1-90

Table 1-16 Impacts of Electricity Tariff Increase on Economy (single-year analysis) ....................... 1-94

Table 1-17 Scenarios of Electricity Tariff Increase: Case 1 (cost increase) ....................................... 1-94

Table 1-18 Scenarios of Electricity Tariff Increase: Case 2 (no cost increase) .................................. 1-95

Table 1-19 Impacts of Electricity Tariff Increase on Bangladesh National Economy (Case 1) ......... 1-95

Table 1-20 Impacts of Electricity Tariff Increase on Bangladesh National Economy (Case 2) ......... 1-95

Table 1-21 Impacts of Gas Price Increase on Bangladesh National Economy ................................... 1-96

Table 1-22 Scenarios of Gas Price Increase ....................................................................................... 1-96

Table 1-23 Impacts of Gas Price Increase on Bangladesh National Economy ................................... 1-96

Table 1-24 Example of Scenarios for Electricity Tariff Increase ....................................................... 1-98

Table 1-25 Scenarios of Gas Price Increase ....................................................................................... 1-98

Table 1-26 Roadmap for PSMP2016 ............................................................................................. 1-100

Table 2-1 Items Required in Feasibility Assessment .......................................................................... 2-18

Table 2-2 Areas of research by type of energy ................................................................................... 2-21

Table 2-3Areas of assistance in research in the electric power infrastructure sector ......................... 2-21


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List of Figures

Page

Figure 1-1 Overall Workflow for This Study ....................................................................................... 1-9

Figure 1-2 Steering Committee and Working Groups ........................................................................ 1-15

Figure 1-3 PSMP2010 Review (Economic Development)................................................................. 1-21

Figure 1-4 PSMP2010 Review (Coal Supply) ................................................................................... 1-22

Figure 1-5 PSMP2010 Review (Gas Supply) ..................................................................................... 1-23

Figure 1-6 PSMP2010 Review (Power Development Plan) ........................................................... 1-24

Figure 1-7 Value Added by Large and Middle Scale Manufacturing Industries ................................ 1-26

Figure 1-8 Illustration of Industrial Development in Bangladesh Toward 2041 ................................ 1-26

Figure 1-9 Stages of Industrial Development and Necessary Policy Measures to Support This ....... 1-27

Figure 1-10 Projection of Final energy Consumption (BAU Scenario) ............................................. 1-27

Figure 1-11 Projection of Final Energy Consumption (Energy Efficiency Scenario) ........................ 1-28

Figure 1-12 Projection of Primary Energy Supply – Scenario 3 ........................................................ 1-29

Figure 1-13 Gas Resource Balance .................................................................................................... 1-30

Figure 1-14 Gas Supply Forecast 2016~2041 .................................................................................... 1-33

Figure 1-15 Forecast of Coal Demand and Supply ............................................................................ 1-35

Figure 1-16 Oil Demand and Supply Balance, 2014 to 2041 ............................................................. 1-38

Figure 1-17 Power Development Planning Flow ............................................................................... 1-40

Figure 1-18 Estimated Composite Daily Load Curve in the Summer in Bangladesh ........................ 1-41

Figure 1-19 Comparision of peak power demand in both models ..................................................... 1-42

Figure 1-20 Relationship between the Time Scale and the Change in PDP ....................................... 1-43

Figure 1-21 Annual Trend of Each Power Plants（MW） ................................................................ 1-45

Figure 1-22 Transition of estimated power demand during 2015-2041 (Unit: MW) ......................... 1-45

Figure 1-23 Reserve Margin ............................................................................................................... 1-46

Figure 1-24 IEACrude Oil Scenario ................................................................................................... 1-47

Figure 1-25 Simulation schem of the supply/demand operation ........................................................ 1-48

Figure 1-26 Generation pattern in 2041 ............................................................................................. 1-49

Figure 1-27 Image for demand and supply simulation ....................................................................... 1-49

Figure 1-28 Annual Trend of Energy Mix in Different Scenarios ...................................................... 1-50

Figure 1-29 Power generation cost under each scenario and Ratio of coal （US cent/kWh） ........ 1-50

Figure 1-30 Scenario-Wise CO2 Emissions（CO2 kg-C/kWh） ...................................................... 1-51

Figure 1-31 Physical Energy Delivery Routes and Risks ................................................................... 1-52

Figure 1-32 An Example of Probability Density of Energy Delivery ................................................ 1-52

Figure 1-33 3E Evaluation Results (Each Value) Figure 1-34 3E Evaluation Results (Total) .. 1-53

Figure 1-35 3E Evaluation Results (Each Value) ............................................................................... 1-54

Figure 1-36 3E Evaluation Results (Total) ......................................................................................... 1-54

Figure 1-37 3E Evaluation Results (Total) ......................................................................................... 1-55

Figure 1-38 Best mix including expansion of renewable enegy ........................................................ 1-56


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Figure 1-39 Location Map of Potential PSPP Sites ............................................................................ 1-58

Figure 1-40 Location Map of Potential Sites for Ordinary and Small Scale Hydropower ................. 1-59

Figure 1-41 Future Power Import Volume and its Share (High Case Scenario) ................................. 1-64

Figure 1-42 Future Power Import Volume and its Share (Low Case Scenario) ................................. 1-65

Figure 1-43 Nuclear Power Development on PSMP2016 .................................................................. 1-66

Figure 1-44 Structure of IAEA Safety Standards ............................................................................... 1-67

Figure 1-45 Nuclear Industry Information Center .............................................................................. 1-69

Figure 1-46 Asian Nuclear Safety Network (ANSN) ......................................................................... 1-70

Figure 1-47 Roadmap for nuclear power development ...................................................................... 1-71

Figure 1-48 The Existing Bulk Power Network System of Bangladesh (2014) ................................. 1-72

Figure 1-49 Development of Access to Electricity (BPDB definition) .............................................. 1-74

Figure 1-50 BREB On-grid Extension Plan Comparison ................................................................... 1-75

Figure 1-51 Number of SHS under IDCOL Program ......................................................................... 1-75

Figure 1-52 Conceptual Map of Locations of Large Scale Power Stations Planned Up to 2035 ....... 1-76

Figure 1-53 Comparison between the Necessary Reserves and the Available Reserves .................... 1-80

Figure 1-54 Trend of Power Frequency Quality Improvement .......................................................... 1-81

Figure 1-55 Schematic Diagram of the Frequency Deviation Immediately ....................................... 1-82

Figure 1-56 Trend of minimum values of frequency immediately ..................................................... 1-82

Figure 1-57 Schedule for Legal Reform ............................................................................................. 1-86

Figure 1-58 Site Selection .................................................................................................................. 1-87

Figure 1-59 Target Site List ................................................................................................................ 1-88

Figure 1-60 O&M Efficiency Improvement Supported by Information Management ...................... 1-91

Figure 1-61 Demand/Supply and Shutdown Planning ....................................................................... 1-91

Figure 1-62 Thermal Power Plant O&M Roadmap............................................................................ 1-92

Figure 2-1 PSMP2010 Review (Power Development Plan) ................................................................ 2-3

Figure 2-2 Organaization of IPP........................................................................................................... 2-4

Figure 2-3 Advanced Electronic Mapping - Object Model System ..................................................... 2-8

Figure 2-4 Introduction of energy storage technology (1).................................................................. 2-12



Figure 2-7 Steam Turbine Rehabilitation Plan ................................................................................... 2-16

Figure 2-8 Combined Cycle Power Generation Remodeling Plan ..................................................... 2-16

Figure 2-9 Training Course Plan ........................................................................................................ 2-17

Figure 2-10 System Functions and Data Flows for a Power Plant in Bangladesh ............................. 2-19


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Abbreviations

Abbreviation Full Tytle

ACC American Chamber of Commerce

ADB Asian Development Bank

ADF Asian Development Fund

ADP Annual Development Programme

AGC Automatic Generation Control

AHWR Advanced Heavy Water Reactor

AMD Acid Mine Drainage

API American Petroleum Institute

APSCL Ashuganj Power Station Company

AR5 The Fifth Assessment Report

ASEAN Association of Southeast Asian Nations

ASME American Society of Mechanical Engineers

ASTM American Society for Testing and Materials

ATC Available Transfer Capability

AZEs Alliance for Zero Extinction Sites

Bangladesh the People’s Republic of Bangladesh

BAPEX Bangladesh Petroleum Exploration & Production Company Limited

BAU Business as Usual

bbl Barrel

bpd Barrel per Day

BCMCL Barapukuria Coal Mine Company Limited

BBS Bangladesh Bureau of Statistics

BCBJ Back Contact Back Junction

BCF Billion Cubic Feet

BDT Bangladesh Taka

BERC Bangladesh Energy Regulatory Commission

BGFCL Bangladesh Gas Fields Company Ltd.

BNBC Bangladesh National Building Code

BOP Bottom of Pyramid

BPC Bangladesh Petroleum Corporation

BPDB Bangladesh Power Development Board

BREB Bangladesh Rural Electrification Board

BST Bulk Supply Tariff

BTK Bull’s Trench Kiln

CBM Coal Bed Methane

CBM Condition Based Maintenance

CC Combine Cycle

CCAC Climate and Clean Coalition

CCGT Combined Cycle Gas Turbine

CCPP Combined Cycle Power Plant

CCT Clean Coal Technologies

CEB Ceylon Electricity Board


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CGE Computable General Equilibrium

CHT Chittagong Hill Tracts

CLDO Central Load Dispatching Office

CNG Compressed Natural Gas

COD Commercial Operation Day

COD Commercial Operations Date

COP Conference of the Parties

C/P Counterpart

CRT Cathode-Ray Tube

CTT Coal Transshipment terminal

DAC Development Assistance Committee

DESCO Dhaka Electricity Supply Company Limited

DFR Draft Final Report

DOE Department of Environment

DOF Department of Forest

DPDC Dhaka Power Distribution Company Limited

DSM Demand Side Management

EBA Electricity Business Act

ECC Environment Clearance Certificate

ECMP Energy Efficiency and Conservation Master Plan

EDC Economical load Dispatching Control

EEC Energy Efficiency and Conservation

EGAT Electricity Generating Authority of Thailand

EGB Exhaust Gas Boilers

EGCB Electricity Generation Company of Bangladesh

EIA Environmental Impact Assessment

EIA Energy Information Administration, USA

ELBL Eastern Lubricants Blenders Limited

EMRD Energy and Mineral Resources Division

EMS Enegry Management System

EN European Norm (European Standards)

EOI Expression of Interest

EPZ Export Processing Zone

ERD Economic Relation Division

ERL Eastern Refinery Limited

ESMAP Energy Sector Management Assistance Programme

EST Environmentally Sound Technology

EU European Union

FAO Food and Agriculture Organization of the United Nations

FBR Fast Breeder Reactor

FC Frequency Convertor

FCK Fixed Chimney Kiln

FD Finance Division

FDI Foreign Direct Investment


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FGMO Free Governor Mode Operation

FIDC Forest Industries Development Corporation

FLEGT Forest Law Enforcement Governance Trade

FR Final Report

F/S Feasibility Study

FSRU Floating Storage Regasification Unit

FY Fiscal Year

GCF Green Climate Fund

GDF Gas Development Fund

GDP Gross Domestic Product

GE General Electric

GEF Global Environment Facility

GHG Greenhouse Gas

GNI Gross National Income

GOB Government of Bangladesh

GPS Ghorasal Thermal Power Station

GSRR Gas Sector Reform Roadmap

GTAP Global Trade Analysis Project

GTCL Gas Transmission Company Limited

ha Hectare

HCU Hydrocarbon Unit

HHI Herfindahl-Hirschman Index

HIES Household Income and Expenditure Survey

HIT Heterojunction with Intrinsic Thin-layer

HRSG Heat Recovery Steam Generator

HSD High Speed Diesel

HVDC High Voltage Direct Current transmission line

Hz Hertz

IAEA International Atomic Energy Agancy

IBRD International Bank for Reconstruction and Development

I&C Instrument & Control

ICI Indonesian Coal Index

IcR Inception Report

ICT Information and Communication Technology

IDCOL Infrastructure Development Company Limited

IEA International Energy Agency

IEE Initial Environmental Examination

IEEE Institute of Electrical and Electronics Engineers

IGCC Integrated Gasifier Combined Cycle

IGFC Integrated Gasifier Fuel Cell

IISD International Institute for Sustainable Development

IMF International Monetary Fund

INDC Intended Nationally Determined Contributions

IOC International Oil Company


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ItR Interim Report

IPCC Intergovernmental Panel on Climate Change

IPP Independent Power Producer

IRR Internal Rate of Return

ISO International Organization for Standardization

JETRO Japan External Trade Organization

JICA Japan International Cooperation Agency

JMAR Japan Management Association Research Institute Inc.

JOCL Jamuna Oil Company Limited

JST JICA Survey Team

KBA Key Biodiversity Areas

KPC Kuwait Petroleum Corporation

ktoe Kilo tonne of Oil Equivalent

KV Kilovolt

kWh Kilowatt Hour

LED Light Emitting Diode

LFC Load Frequency Control

LMZ Leningradsky Metallichesky Zavod

LN Natural Logarithm

LNG Liquefied Natural Gas

LOLE Loss of Load Expectation

LOLP Loss of Load Probability

LPG Liquefied Petroleum Gas

LPGL LP Gas Limited

LTCC Longwall Top Coal Caving

LTSA Long Term Service Agreement

MCF Million Cubic Feet

MDGs Millennium Development Goals

METI Ministry of Economy, Trade and Industry

MF Ministry of Finance

MLJPA Ministry of Law, Justice, & Parliamentary Affairs

mm millimeter

MMBTU Million British Thermal Unit

mmcf Million Cubic Feet

mmscfd Million Standard Cubic Feet per Day

MMTPA Million Metric Ton per Annam

MOI Ministry of Industries

MoPEMR Ministry of Power, Energy and Mineral Resources

MPL Meghna Petroleum Limited

MPM&P Management, Production, Maintenance & provisioning Services

MPR Maintenance Period Rate

MRT Mass Rapid Transit

MW Megawatt

MWh Megawatt Hour


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MWR Ministry of Water Resources

NLDC National Load Dispatching Center

NM Nautical Mile

NOC No Objection Certificate

NRECA National Rural Electrification Cooperative Association

NSAPR II National Strategy for Accelerated Poverty Reduction II

NWPGCL North West Power Generation Company

O&M Operation and Maintenance

OCCTO Organization of Cross-regional Coordination of Transmission Operations

OCR Ordinary Capital Resources

O/C Open Cut

ODA Official Development Assistance

OECD Organization for Economic Co-operation and Development

OICA International Organization of Motor Vehicle Manufacturers

p.a. Per Annum

PAS Protected Area Systems

PBS Palli Bidyuit Samity

PC Power Cell

PCFBC Pressurized Circulating Fluidized Bed Combustion

PCJSS United People's Party of the Chittagong Hill Tracts (Parbatya Chattagram

Jana Sanghati Samiti)

PD Power Division

PDCA Plan, Do, Check, Action

PDP Power Development Plan

PEMFC Polymer Electrolyte Membrane Fuel Cell

PGCB Power Grid Company of Bangladesh Limited

PM Particulate Matter

POCL Padma Oil Company Limited

P/P Power Plant

PPA Power Purchase Agreement

PPP Power Purchasing Parity

PPP Public Private Partnership

PRF Protected Public Forest

PSA Production Sharing Agreements

PSC Product Sharing Contract

PSMP Power System Master Plan

PSPP Pumped Storage Power Plant

PSS/E Power System Simulator for Engineering

PV Photo Voltaic

Q & A Questions & Answers

R&D Research and Development

Re Relaiability

REB Rural Electrification Board

RES Renewable Energy power Source


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RF Reserved Forest

RHD Road and Highways Department

RMG Ready-Made Garment

SAOCL Standard Asiatic Oil Company Limited

SARI/EI South Asia Regional Initiative for Energy Integration

SC Steering Committee

SC Super Critical

SCADA Supervisory Control And Data Acquisition

SCC Site Clearance Certificate

SD/VAT Supplementary Duty/Value Added Tax

SDGs Sustainable Development Goals

SEC Specific Energy Consumption

SEZ Special Economic Zone

SGFL Sylhet Gas Fields Limited

SHS Solar Home System

SIPP Small Independent Power Producers

SME Small and Medium Enterprise

SOFC Solid Oxide Fuel Cell

SPM Single Point Mooring

SREDA Sustainable and Renewable Energy Development Authority

SSHP Small Scale Hydropower Plant

ST Steam Turbine

TCF Trillion Cubic Feet

TDS Transmission and Distribution Sector (in General Electricity Utility)

Tk Taka

TEPCO Tokyo Electric Power Company, Inc.

TEPSCO Tokyo Electric Power Services Co., Ltd.

TFC Total Final Consumption

T/D Transmission and Distribution

TNA Technology Needs Assessment

TOR Terms of Reference

TPES Total Primary Energy Supply

UAE United Arab Emirates

UCG Underground Coal Gasification

UCTE Union for the Co-ordination of Transmission of Electricity

UFR Under Frequency Relay

U/G Under Ground

UMIC Upper Middle Income Countries

UNEP United Nations Environment Program

UNFCCC United Nations Framework Convention on Climate Change

UN-REDD United Nations Reducing Emissions from Deforestation and forest

Degradation

USD United States Dollar

USC Ultra Super Critical


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WB World Bank

WEO World Energy Outlook

WG3 Working Group 3

WPP World Population Prospects

WZPDCL West Zone Power Distribution Company Limited

YTF Yet to find

η Efficiency


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Chapter 1 PSMP2016 Summary

1.1 Abstract

The Power System Master Plan (PSMP) 2016, sponsored by Japan International Cooperation Agency

(JICA), aims at assisting the Bangladesh in formulating an extensive energy and power development

plan up to the year 2041, covering energy balance, power balance, and tariff strategies.

Bangladesh has an aspiration to become a high-income country by 2041. The development of energy

and power infrastructure therefore pursues not only the quantity but also the quality to realize the

long-term economic development.

Since Bangladesh is facing to the depletion of domestic gas supply, various issues such as sustainable

development harmonizing with economic optimization, improvement of power quality for the

forthcoming high-tech industries, and the discipline of operation and maintenance (O&M) for power

plants need to be addressed holistically.

Furthermore, energy subsidy is also a tough challenge, because there’s always a concern that drastic

increase of fuel and electricity prices may trigger another negative effect on the national economy. A

meticulous analysis is required to find the best pathway to attain the sustainability of the energy and

power sectors in balancing with the economic growth.

The new PSMP study covers all the aforementioned challenges comprehensively, and come up with

feasible proposals and action plans for Bangladesh to implement.

1.2 Background and Purpose

The energy source of the People’s Republic of Bangladesh (hereinafter “Bangladesh”) mainly depends

on Domestic Natural Gas. The Government of Bangladesh formulated the Power System Master Plan

2010 (PSMP2010) targeting, among others, for a long term energy diversification due to the foreseen

decrease in the production volume of Natural Gas.

However, energy development is not on track compared with the PSMP2010 plan, because various

assumptions about expected sources for base load energy have subsequently changed. In particular, a

review is needed reflecting namely exponential increasing of oil based rental power plants and

development constraints of domestic primary energy.

Currently, many of power plants in Bangladesh cannot generate electricity as specified in terms of

power, thermal efficiency etc. for each unit. Daily shortage of power does not allow to stop facilities

and to undertake periodical maintenance in a planned way. Legal framework does not stipulate

preventive maintenance works as an obligation for plant owner. Low financial soundness of public

generating companies due to low electricity tariff does not permit to purchase in advance necessary

spare parts. In order to secure a stable electricity supply, we need to find out solutions to all of these

issues and to establish a comprehensive institutional framework. Moreover, hydro power generation

studies (on small scale hydropower plants of 30 kW ～ 5MW and a pumped storage power plant as a

regulator between demand and supply) have become an urgent issue through the government’s

renewable energy promotion policy.

Based on the aid policy of the Government of Japan for Bangladesh, the Japan International

Cooperation Agency (JICA) is considering the power sector as one of priority areas assisting

Bangladesh not only by Yen Loans to the construction of power plants (gas combined cycle,

super-critical using import coal and hydropower), transmission and distribution lines and development

of renewable energy but also by Technical Assistance such as the master plan for energy efficiency.

JICA is thus supporting the entire power and energy sector. It was under such circumstances that JICA

decided to undertake the Power System Master Plan 2016 (PSMP2016) in order to grasp middle to

long term development issues and risks and to formulate a comprehensive and result-oriented aid

strategy for the energy sector by examining effective approaches for each issue.

After the start of this survey, however, the Government of Bangladesh announced, in its new

policy“Vision 2041”, an important target of becoming one of the developed nations by 2041.

Consequently, for the power and energy sector which receives quite dominant development budget, it

has become newly necessary to secure the consistency between the economic development strategy of


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the country toward joining the developed countries and the master plan of the power and energy sector

(PSMP). With such consistency only, JICA will be able to make the best use of the result of this survey

as basic information for the future cooperation.

To study consistency between an economic growth strategy and PSMP, an additional survey on

estimated changes of the industrial structure that will be brought by the coming strategy and a precise

forecast of future demand of primary energy and corresponding supply policy must be added to this

survey, since the power sector is one of the largest sectors which consume primary energy. It was

therefore decided to estimate in this survey the most rational and probable demand and supply

scenarios of primary energy for other sectors than power sector such as fertilizer, industry, commerce,

and transportation.

Moreover, the power sector will be required to cope with the changes of industrial structure in line

with the economic growth as expected in order for Bangladesh to join the developed nations.

Specifically, improvement of the quality of electricity is indispensable given the view of the

government that sophistication of industries is generally essential for the nation to become one of the

developed countries.

After the commencement of this survey, Bangladesh started considering also a specific plan to expand

power import from neighbouring countries such as India, Bhutan and Nepal. Usually, international

cooperation in power system is oriented toward direct cooperation by means of alternate current and,

to do so, quality of electricity is required to be equivalent or better than that of counterpart countries. It

is therefore necessary for the promotion of international cooperation to improve the quality of

electricity. Since this issue will be a concern to the entire power sector in revising PSMP, it was also

decided to add to this survey collection of additional basic information and examination of feasible

measures responding to the specific needs of quality improvement.

Therefore, the collection and analysis of the information on the plan for the supply and demand for

primary energy sources and the needs for the improvement of the quality of power supply were

included in this survey that had consisted of the revision of power development plan and the studies on

the institutional reform for the improvement of O&M and the introduction of hydropower generation.

This inclusion of the new survey subject enabled the formulation of a new master plan that covers not

only the power sector but also the energy sector comprehensively and describes the interface between

the two sectors. The new master plan is the output of the first joint survey of the two divisions in the

Ministry of Power, Energy and Mineral Resources (MoPEMR), Power Division and Energy Division,

and this survey is expected to serve as a good precedent of the cooperation between them in the

implementation of policies in the power and energy sectors.

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1.3 Vision Paper


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Policy Vision

1.4 Policy Vision

The Government of Bangladesh declared its intention to develop the country in order to become one of

the advanced countries by 2041 as the key goal of VISION2041. To achieve the VISION, this master

plan defines the intended goal and “five key viewpoints” that are to be kept in mind by all the

members who are involved in the realization of the goal.

1.4.1 PSMP2016 Objective

To show the targets and approach in the Energy and Power Sectors in order to achieve Bangladesh’s

national goal: to achieve VISION2041 and become a high-income country by 2041


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1.4.2 Five Viewpoints of PSMP2016

1 Enhancement of imported energy infrastructure and its flexible operation

For Bangladesh to become one of the high-income nations by 2041, the country needs to achieve

continuous economic growth of 7.4% annually for the period from 2016 to 2020 to initially reach the

standard of the medium to high income nations. Subsequently, its GDP would then grow steadily

although the growth rate may slow down slightly. With this economic growth, the demand for primary

energy, in particular in the industrial sector and the transport sector, is expected to increase sharply

under both the BAU and the energy efficiency scenario.

To meet this rapidly increasing demand for primary energy, the country needs to undergo a major

change from its existing dependency on domestic natural gas to a dependency on various imported

energies. During the period where imported energies are consumed in large quantities, the existing

inefficient energy resource consumption would directly lead to an enormous amount of economic loss.

In the future, the efficient use of energy, its supporting infrastructure and improvements to related

policies and systems will be essential. The infrastructure improvements include the domestic facilities

as well as interaction with neighboring countries. The policy and system improvements include the

strategic positioning of various energy resources and a legal system that promotes efficient use of

energy by revising the current inefficient practices.

2 Efficient development and utilization of domestic natural resources (gas and coal)

While the amount of deposits of natural gas discovered domestically is decreasing, the limited

resources must be utilized to the maximum by developing an efficient development structure.

Achievements in mining and the development of undiscovered resources are limited under the existing

structure and a drastic review is necessary, such as PSC reform and the introduction of technologies

from other countries. In addition, as mentioned in “1”, development of an infrastructure for the

economical and efficient use of gas and development and implementation of the system are necessary.

Since the domestically produced coal is of a high quality and the reserves are abundant, the future

development of an economical domestic coal development structure is important. Since domestic coal

development has a serious impact on the surrounding environment and society and requires a long

period of time, the necessary actions must be taken sufficiently in advance in anticipation of

VISION2041.

3 Construction of a robust, high-quality power network

To meet the rapidly increasing demand for power and to realize its stable supply, large-scale power

supply development and construction of system facilities are necessary. In terms of new issues and

opportunities for power supply development, power imports from neighboring countries (international

cooperation), and nuclear power generation can be considered. System enhancement is essential in

addition to these power supply developments.

In order to realize future rapid economic development, industrial development such as the transition to

higher value-added industries is essential for Bangladesh, necessitating high-quality power to support

such an advancement. Therefore, in the future, Bangladesh requires improvements in its infrastructure

and the development and implementation of a system that provides high-quality power for electrical

frequency stabilization, as well as the development of the power system.

4 Maximization of green energy and promotion of its introduction

For Bangladesh, which is susceptible to climate change, the development of low-carbon energies is

extremely desirable, not simply from the aspect of the international trend, recommending renewable


Final Report

1-6

energies and energy diversification, but from the point of improving energy access for rural people.

Therefore, development of domestic renewable energies is indispensable.

However, there is a limit to the introduction of renewable energies on a large scale in Bangladesh due

to the availability of appropriate land. Importing power from neighboring countries using

hydroelectric power generation has much greater possibility than supplementation programs for the

limited degree of renewable energy introduction in Bangladesh.

5 Improvement of human resources and mechanisms related to the stable supply of energy

To realize advanced utilization and the stable supply of energy and power for Bangladesh,

non-material support such as reform of the existing system, development of a new system, and

development of human resources for their implementation is essential, as well as material support such

as the construction of infrastructure. In particular, to cope with the coming era of mass consumption of

imported energy, efficiency improvement of gas fired power plants, and the development of legal

systems and human resources for its realization, are urgently necessary.

In the same way, significant improvements are required in many aspects of international cooperation

and nuclear power generation from Bangladesh’s existing power supply development and system

operation. Although the development of legal systems and human resources relating to international

cooperation and nuclear power generation is an extremely difficult task for Bangladesh, this task needs

to be achieved.

For power rates, structural reform of the existing below-cost power rates is necessary in terms of the

sustainability of the power sector. In the future, an increase mainly in household power rates is

required, which does not inhibit Bangladesh’s economic growth. In this case, cost reduction measures

must be taken by analyzing the possibility of cost reductions in the power generation, supply, and

distribution sectors prior to the decision-making on an increase in power rates, while alleviating the

impact on the lower socio-economic classes.

1.4.3 Importance of Contribution and Responsibility to the International Community

In 2015, the United Nations adopted the Sustainable Development Goals (SDGs) as the international

development goals. These goals have been established by using the development goals for the period

from 2000 to 2015, Millennium Development Goals (MDGs), as the foundation.

Plainly speaking, the old goals, MDGs, were development goals targeting “developing countries” and

adopted eight goals for poverty countermeasures for the period up to 2015.

The new goals, SDGs, are development goals that are set in 17 fields under “sustainable development”

as cross-cutting themes, including developed countries as well as developing countries. In particular,

the following goals are closely related to the energy and power fields.

Goal 7 “Clean energy for everyone”: Secure access to affordable, reliable, sustainable and modern

energy for everyone

Goal 9 “Industrial and technological innovation and social infrastructure”: By developing robust

infrastructure, promote inclusive and sustainable industrialization and also expand technological

innovation.

Goal 13 “Urgent handling of climate change”: Take urgent countermeasures for climate change and its

impact.

To become one of the advanced countries, proper recognition of contribution to the international


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1-7

society and its accompanying responsibilities are necessary. To establish this master plan, further

agreement with the major direction of the international society is required. The relationships between

these SDGs and this master plan are shown below.

Table 1-1 Link between PSMP2016 and the SDGs Sustainable

Development Goals: SDGs

Affordable and

clean energy

Industry, innovation,

infrastructure

Climate action

Ensure access to

affordable, reliable,

sustainable and modern

energy for all

Build resilient

infrastructure, promote

sustainable

industrialization and

foster innovation

Take urgent action to

combat climate change

and its impacts

Concept Energy for everyone and

clean energy

Infrastructure for

industries and

technological

innovation

Specific actions for

climate change

Specific contents Secure access to

affordable, reliable,

sustainable and modern

energy for everyone.

By developing robust

infrastructure, promote

inclusive and

sustainable

industrialization and

also expand

technological

innovation.

Take urgent

countermeasures for

climate change and its

impact.

Five key viewpoints

Viewpoint 1

Robust Energy Import Infrastructure

and Flexible Operation ◎

Viewpoint 2

Domestic Resources’ Efficient

Development and Use (Natural Gas

and Coal)

◎

Viewpoint 3

Quality and Robust Power System

Development ◎ ◎ ○

Viewpoint 4

Advanced Use of Green Energy ◎ ○ ◎

Viewpoint 5

Human Resource and System

Development for Stable Energy

Supply

○ ◎ ○

Source: UNDP Website and JICA Survey Team


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1-8

Practical Vision

1.5 Practical Vision

1.5.1 Relationships between the Five Key Viewpoints and the Master Plan Investigation Items

The table below shows the relationship between “the five key policy viewpoints” mentioned above

and the components of the master plan. The master plan is composed of a policy for the economic

growth, a plan on the primary energy balance, a plan on the power balance mainly based on the power

development plan and a policy on energy prices. The components of the master plan are closely related

to the five key viewpoints required for achieving the vision mentioned in the previous section as

shown in the table below.

Practical V

ision

PSMP Composition

Political Vision

Five Key Viewpoints

Viewpoint 1

Robust Energy

Import

Infrastructure

and Flexible

Operation

Viewpoint 2

Domestic

Resources’

Efficient

Development

and Use

(Natural Gas

and Coal)

Viewpoint 3

Quality and

Robust Power

System

Development

Viewpoint 4

Advanced Use

of Green

Energy

Viewpoint 5

Human

Resource and

System

Development

for Stable

Energy Supply

Economy Economic

Development ◎

Energy

Balance

2. Energy Demand

and Supply ◎

3. Gas ◎ ◎ ◎

4. Coal ◎ ◎ ◎

5. Oil ◎

Power

Balance

6. Power

Development Plan ◎ ◎

7. Hydropower ◎ ◎

8. Renewable

Energy ◎

9. power Import ◎ ◎

10. Nuclear Power ◎

11. Power System

Plan

◎

12. Powr Quality

◎

13. Thermal O&M ◎

Tariff 14. Energy Tariff ◎


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1-9

1.5.2 Methodologies for this Study

(1) Implementation flow

The overall methodologies and tasks for this study are summarized in the following flow chart.

Source: JICA Survey Team

Figure 1-1 Overall Workflow for This Study

(2) Study on the Future Scenarios of Economic Development

To begin with, this Study considers the future scenarios of economic development in Bangladesh as

the baseline data for energy supply and demand projections.

Taking into account that this study is targeting the period up to 2041, which is considerably long,

structural changes to the Bangladesh economy are expected to occur during its course. That is,

macroeconomic parameters for energy demand forecasts such as GDP and industrial production need

to be projected on the condition that non-linear structural changes to the national economy will take

• Population, GDP

• industrial production etc.

• Projection of sectorial energy demand

based on economic indicators.

Sectorial Energy Demand Projection

• The modes of energy supply to each sector is determined

considering the nature of energy demand.

Energy Supply to Each Sector

Residential

Commercial and public service

Industrial

Transport

Agriculture etc.

Residential

Commercial and public service

Industrial

Transport

Agriculture etc.

Others

OilNatural Gas

Electricity

(Grid)

Macroeconomic Prospects

• Scenarios of long-term

structural changes of

the economy referring

to the experiences of

Asian countries

Economic Development Scenarios

• Necessary volume of energy supply to meet the demand is estimated.

• Insufficient domestic production is supplemented by imports

Primary Energy Balances

Natural GasCrude

oilCoal Others

Imports (LNG, Coal, etc.)

Domestic production

• Production potential of natural gas, crude oil, coal etc.

Availability of Domestic Energy Sources

• The modes of energy supply (especially electricity) is also

determined based on the availability of primary energy sources.

Energy Transfers from Primary Energy Supply

Natural Gas Crude oil Coal Others

Electricity (Grid)

Non-electricity supply

• Optimized set of 3E needs to be considered

- Economic viability

- Environmental quality

- Energy security

Considerations for 3E

Demand-side

Analysis

Supply-side

Analysis

En

erg

y S

up

ply

& D

em

an

d A

naly

sis

Po

wer

Su

pp

ly M

aste

r P

lan

• Necessary CAPEX for forming the infrastructure of energy supply (electricity, natural gas etc.) is formulated from the previous sections, then the costs

of energy supply up to 2041 are estimated.

• The energy tariff in Bangladesh, which is generally set lower than the actual costs of supply with subsidies, needs to be adjusted to be cost-reflective

with the progress of economic development.

2015 2041

Projection of Costs of Energy Supply and Tariff Policy

Costs of energy supply in 2015 (electricity, gas etc.)

Estimated costs of energy supply in 2041

Tariff of energy supply in 2015

1. Cost-reflective tariff to be achieved as early as possible

2. Cost-reflective tariff to be achieved but as a future challenge

3. Tariff remains to be subsidized even in the future

Options of Energy Tariff Policy (example)

Subsidies

• It needs to be noted that raising energy tariff may cause a negative effect on national economy in Bangladesh, such as the competitiveness of the

industrial sector. If a seriously negative effect is expected, policy tools for mitigation (e.g. subsidies) may be justified.

• The impact of energy tariff increase on the national economy is quantitatively analyzed using GTAP (Global Trade Analysis Project) model.

Impact of Energy Tariff Increase on National Economy

En

erg

y S

up

ply

Ta

riff

An

aly

sis


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1-10

place along with the development of Bangladesh economy.

Though it is hardly possible to determine such structural changes quantitatively, this study considers

the future scenarios of economic development that are likely to occur in Bangladesh, as ascertained

through discussion with local stakeholders. The Government of Bangladesh (GoB) has set an

ambitious target for the country to become a member of the “High-income Countries” by 2041, though

the details to support this have not been provided. This Study also evaluates the feasibility of this

target through the economic development projections and provides policy recommendations for

achieving the economic development target.

(3) Energy Demand Forecast and Projection of Necessary Volume of Primary Energy Supply

Referring to the projection of economic development, this Study formulates the energy demand

forecast and then estimates the necessary supply that meets the energy demand in the future.

It also needs to be noted that the optimized set of energy supply varies among countries depending on

their geographical and geopolitical conditions. Especially for a country like Bangladesh, where the

domestic energy production such as natural gas has mainly satisfied the domestic demand but the

depletion of energy production and increased dependence on imported energy sources are expected in

the future, it is appropriate to develop the energy supply plan by prioritizing the optimized utilization

of domestic energy production and then by incorporating the imported energy sources in the energy

supply system to fill the insufficiency.

Therefore, this study first estimates the total volume of primary energy supply necessary for

Bangladesh based on the energy demand forecast and then estimates the requirement for each energy

source as the combination of domestic energy production and imports.

(4) Power Supply Master Plan

For the meanwhile, this Study also formulates the energy supply and demand balance in terms of the

modes of energy supply to end consumption of energy. Among the various modes of energy supply,

the electricity supply needs more specific considerations for infrastructure development, thus this

study segregates the sections related to power supply and presents the “Power Supply Master Plan”.

In order to determine the optimized set of supply modes, this study takes approaches from both the

demand-side and supply-side. From the demand-side, each mode of energy supply (electricity, natural

gas, oil products etc.) is projected as a part of the aforementioned energy demand projection and the

electricity demand is determined. In Bangladesh, the electrification of unelectrified villages is still in

progress and even in the already electrified villages a shift of energy supply to electricity from other

modes will continue to occur. These transitions need to be considered in an appropriate timeline.

From the supply-side, how to match the primary energy supply sources with the modes of energy

supply is analyzed. Because forming energy supply infrastructure requires a considerably long

lead-time, drastic change of energy supply modes in a short time is not possible. Hence, an appropriate

timeline for infrastructure development also needs to be considered so that the existing energy

infrastructure will be gradually strengthened and modified. For example, the industrial sector, which is

supposed to increase energy demand rapidly in Bangladesh, may consume more electricity from the

grid if sufficient volume of electricity supply from the grid exists. However, because of the limitation

with grid power supply and the considerable capacity of existing captive power generation that has

been installed in the past, it may take time to phase out the use of electricity from captive power

generation, which is generally less efficient than the power supply from the grid.

Then, the analyses from both the demand-side and supply-side are harmonized to determine how to

establish the energy supply to end consumption. The future requirements of the primary energy supply

will be finalized by calculating back from the energy supply to end consumption, considering that the

energy loss from transfer (e.g. power generation), transport and consumption differs among different

modes of energy supply.

(5) Quantitative Evaluation of 3E


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For identifying the best energy mix scenario for “Power Supply Master Plan”, 3E (economic viability,

environmental quality, and energy security) evaluation is employed.

Needless to say, for a country like Bangladesh where energy demand is expected to increase rapidly to

sustain the economic development, economic viability, i.e. “assuring that energy supply meets the

energy demand in an economically reasonable way”, needs to be considered as a priority.

However, as the country’s economic development is expected to reach a certain level of maturity by

2041, which coincides with GoB’s national target of the country becoming a member of the

“High-income Countries”, this Study expects that the energy policy will need to assume responsibility

beyond “low-cost supply” and that it will affect the structure of energy supply in Bangladesh. The

country is expected to raise its domestic and international commitments to reduce environmental

burdens such as greenhouse gas emissions. Considering that these environmental commitments can

affect the plan for future energy supply, this study discusses with the stakeholders the policy options

that the country will need to prepare.

In addition, as the Bangladesh economy will continue to be enhanced and modernized, the necessity

for stability of energy supply is expected to gain importance. In order to achieve stability of the energy

supply, not only improving the energy supply infrastructure itself but also improving stability in the

upstream of the supply chain, i.e. stability of quantity and prices to secure primary energy supply, will

gain more importance. There is some literature both in Japan and overseas that has attempted a

quantitative evaluation of energy security, but standardized methodologies have not been established.

It also needs to be noted that the main concerns about energy security may differ among countries.

Therefore, in evaluating the energy security of Bangladesh, these past studies are reviewed but their

methodologies are not strictly followed. An appropriate set of performance indicators is introduced

through discussion with stakeholders in Bangladesh.

This study proposes a future energy supply that is appropriate for Bangladesh as a “responsible”

developed country, taking also into account quantitative evaluations not only from the aspect of

economic viability but also from the aspects of environmental commitments and energy security.

(6) Analysis of the Financial Conditions of the Power Sector and the Costs of Power Supply

Following the results of supply and demand projections for energy and power conducted in the

previous sections, this study analyzes the financial conditions of the power sector in Bangladesh and

the costs of the power supply.

In order to achieve self-contained and sustainable management of the power supply, the power supply

tariff should be set at a level so that these supply costs can be appropriately recovered from

end-consumers. The current status in Bangladesh, however, is that the tariff is set at a low level that

can hardly recover the costs appropriately. This study discusses the direction of power tariff reforms

while ascertaining the overall picture of the power sector’s financial conditions and the costs of power

supply.

(7) Estimation of the Impact of Energy Tariff on National Economy

On the other hand, it is common worldwide that raising energy tariffs is a politically sensitive issue

and that tariff reforms may need to be made gradually. In addition, drastically raising the energy tariff

at the time when the manufacturing sector of a country starts to develop and to be exposed to

international competition may affect the sector’s international competitiveness.

Therefore, the study on the energy supply tariff in Bangladesh up to 2041 needs to analyze how the

“cost-reflective tariff will affect the national economy depending on the timeline to achieve this”,

taking into consideration the level of economic development.

In order to evaluate the effects of raising energy supply tariffs on the national economy quantitatively,

this study runs the simulation model called GTAP (Global Trade Analysis Project). Referring to the

results of this simulation, this study makes a policy recommendation on the future energy supply tariff.


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1.5.3 Scope of work

The Survey had been carried out according to the minutes between JICA and the Bangladesh

government. The JICA Survey Team conducted the following items and make reports on the basis of

the survey policy and considerations. The Survey started at the end of October 2014, be carried out as

per following Table, and the Final Report had submitted in September 2016.

Table 1-2 Contents of the Study

Contents of the Study

1 Confirmation of the background

2 Review of PSMP2010 and develop PSMP2016

Primary energy demand and supply scenario

O&M policy

Best Mix of generation power sources

Study of issues related to generation plant and transmission line system development plan

Study of consistency of off-grid renewable energy development and power development plan

Study of economic impact on energy price hike and its countermeasures

Study of JICA’s potential projects in power and energy sector

3 Collect information on O&M

Current O&M situation in national thermal power plants

Collection of basic data for upgrading national power plants to combined cycle

Selection of model thermal power plant among existing plants to consider O&M and upgrading

to combined cycle

Cost-benefit analysis, risk analysis and assistant approach for model power plant

Study of legal framework for sustainable O&M implementation

Concept level plan of the combined cycle to model plant

Arrangement of risks and issues in the application of combined cycle; examination of JICA

approach

Report on the study from legal system examination

4 Collect information on domestic hydropower potential

Review of existing documents about micro hydropower plant and interviews with related

agencies

Site survey, analysis and selection of potential hydropower plant, such as Kaptai Lake

Preparation of the TOR for the required F/S or pre-F/S in the next stage

Preliminary Social and environmental evaluation for the proposed project sites

5 Primary Energy（Fuel）

Study and collect basic information for primary energy demand forecast and making supply

plan

Study of development regarding Seventh five-year plan

Preparation of prospects for economic development and energy demand forecast by 2041

Consideration of exploration of undiscovered domestic natural gas and development plan

Preparation of primary energy supply plan

Calculation of cost required for developing infrastructure for energy supply

Review of price in terms of domestic energy supply

Making financial plan (Future scenario considering price hike for energy supply)

Technical issues related to reviewing introduction of LNG receiving terminal

Confirmation of status of LNG receiving terminal plan in progress

6 Improvement Measures for Power Quality

(1) Proposal for Preparation of a Legal Framework, rules and improvement of work procedures

Propose and support the preparation or amendment of various rules with reference to the rules in


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1-13

Contents of the Study

Japan (or Europe/America, if necessary) and TEPCO.

Check progress of amendment of the Grid code by BPDB and suggest reinforcement of NLDC’s

orders and generator participation in frequency control.

(2) Draft plan for frequency quality improvement

Evaluate the frequency quality improvement by introducing generators with frequency control

functions.

Propose the development of a future plan for securement of spinning reserve (free governor

mode, LFC) and roadmap for frequency quality improvement for PGCB (NLDC) and BPDB,

and regulating authorities (Energy division and BERC).

(3) SCADA system renewal plan for NLDC

Confirming needs for introducing new functions or adding data to NLDC’s SCADA system, in

order to realize online output instruction orders for power stations.

Possibility study for introducing Japanese SCADA system

7 Holding of the seminars

1st Seminar (November 2014, Dhaka)

Agenda: Explanation of and discussion on the survey plan

2nd Seminar (June 2015, Dhaka)

Agenda: Explanation of and discussion on the interim report

3rd Seminar (December 2015, Dhaka)

Agenda: Explanation of and discussion on the interim report (reflecting survey results after 2nd

Seminar)

4th Seminar (June 2016, Dhaka)

Agenda: Explanation of and discussion on the survey results in the draft final report

8 Reports to be submitted

Inception Report (October 2014)

Interim Report (December 2015)

Draft Final Report (June 2016)

Final Report (September 2016)



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1-14

1.5.4 Survey Implementation Feamework

Five years have already passed since the latest PSMP2010 was prepared, so the Survey targeted not

only a review of PSMP2010 but also studied the plan up to 2041. The review of the Survey was

discussed and confirmed with the government and relevant agencies in Bangladesh, and also with

JICA.

The Survey was conducted with one steering committee and four subordinate working groups to

facilitate consensus building over a wide area of the relevant organizations. The committee and all

technical discussion meeting were set up on the initiative of the Power Division (PD) of the Ministry

of Power, Energy and Mineral Resources (MPEMR).

(1) PSMP2010 Review Steering Committee

The Steering Committee members include PD of MPEMR, Energy and Mineral Resources Division

(EMRD) of MPEMR, Power Cell (PC) of MPEMR, Bangladesh Power Development Board (BPDB),

Power Grid Company of Bangladesh (PGCB), Secretary, Economic Relations Division (ERD) of

Ministry of Finance (MF), Financial Division (FD) of MF, Ministry of Law, Justice, & Parliamentary

Affairs (MLJPA), Ministry of Water Resources (MWR), and the Prime Minister’s Office. The Steering

Committee is the organization that makes the highest decisions based on the discussions with the 5

subordinate technical discussion meeting.

(2) PSMP2010 Review Technical discussion meeting

The PSMP2010 Review Working Group members include PD of MPEMR, EMRD of MPEMR, PC of

MPEMR, Sustainable and Renewable Energy Development Authority (SREDA), BPDB, generation

corporation, PGCB including National Load Dispatch Centre (NLDC), Infrastructure Development

Company Limited (IDCOL), Petrobangla and its subordinate companies, ERD of MF, and FD of MF.

Technical discussion meeting will discuss the reduction of subsidiaries for energy utilities, the impact

on the amount of LNG imports and the prices of electricity and gas, the coexistence of off-grid

renewable energy and on-grid equipment, and issues across the executing agencies.

(3) Thermal Power Plant O&M Technical discussion meeting

The O&M Working Group members include PD of MPEMR, PC of MPEMR, BPDB, generation

corporation, PGCB including NLDC, Petrobangla and its subordinate companies, and MLJPA.

Technical discussion meeting will discuss the amendment of the Electricity Act, and related laws and

regulations.

(4) Hydropower Development Technical discussion meeting

The Hydropower Development Working Group members include PD of MPEMR, MWR, and BPDB.

Technical discussion meeting will discuss the impacts and countermeasures downstream due to the

planned dam construction, and issues related to the executing agencies.

(5) Primary Energy Technical discussion meeting

The Primary Energy technical discussion meeting was composed as a counterpart agency to PD of

MPEMR, and as a new counterpart agency to the Energy Division (ED).

(6) Improvement Measures for Power Quality Technical discussion meeting

Improvement Measures for Power Quality technical discussion meeting cooperates with the Master

Plan technical discussion meeting and Thermal Power technical discussion meeting. Technical

discussion meeting examines proposals for Preparation of a Legal Framework, rules and

improvements for work procedures, and a draft plan for frequency quality improvement.


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Figure 1-2 Implementation framework


Final Report

1-16

1.5.5 JICA Study Team

The JICA Study Team is composed of the following members.

Assignment Name

Team Leader/Power Development Plan (A) Toshiyuki Kobayashi

Adviser to PM/Power Development Plan (B) Kunio Hatanaka

Power System Planning A Masaharu Yogo

Power System Planning B Shinichi Funabashi

Primary Energy Analysis 1A (Coal) Hajime Endo

Primary Energy Analysis 1B (Gas and Oil) Kazuo Koide

Primary Energy Analysis 2A (Energy Balance) Tomoyuki Inoue

Primary Energy Analysis 2B (Energy Balance) Takeshi Aoki

Economic and Financial Analysis A Shigefumi Okumura (Kei Owada)

Economic and Financial Analysis B Dinh Minh Hung

Energy Supply Cost Analysis Satoko Horie

Environmental & Social Considerations A Shigeki Wada

Environmental & Social Considerations B Akiko Urago

Renewable Energy Masaki Kuroiwa

Rural Electrification Toshifumi Watahiki

Transmission and Substation Equipment Osamu Matsuzaki

Sub-team Leader/Thermal Power Plant O&M A Genshiro Kano

Thermal Power Plant O&M B Ken Shimizu

Thermal Fired Power Plant Ability Analysis A Masahiro Ose (Sho Tai)

Thermal Fired Power Plant Ability Analysis B Hiroyuki Sako (Eiji Naraoka)

Thermal Fired Power Plant Ability Analysis C Yusuke Irisawa

Legal Framework Design Katsuhiro Komura

Hydropower Planning Jun Tamagawa

Sub-team leader (Primary energy)/

Energy economic analysis Yasushi Iida

Economic growth strategy Masaya Nakano

Environmental Policy Shunsuke Kawagishi

Energy supply and demand analysis (Commercial) Mari Iwata (Sayaka Okumura)

Energy supply and demand analysis (Industrial) Hideshige Matsumoto

Energy supply and demand analysis (Transportation) Hidenao Tanaka

Energy supply and demand analysis (Energy Model) Yumiko Watanabe

Macroeconomic Analysis Akiko Higashi

Energy supply and demand analysis (Electric Power) Daichi Saito


Final Report

1-17

Assignment Name

Energy development analysis

(LNG gas development A) Hideo Matsushita


(LNG gas development B) Uichiro Machida


(LNG gas development C) Daihachi Okai


(Interior Natural gas development) Masaaki Ebina

Sub-team leader/Power system operation A Shinichi Suganuma

Power system operation B Masafumi Shinozaki

Power system operation C Keisuke Ueda (Hideaki Kuraishi)

Power system facilities A Kazuki Kito

Power system facilities B Hisanori Masuda (Naoto Tokoda)

Power system facilities C Keisuke Kusuhara

Sub-team leader (Energy strategy)/Energy policy Minako Matsukawa (Mochida)

Payment structure (Electric power and Gas) A Masato Muto

Payment structure (Electric power and Gas) B Junji Ueda

1.5.6 Past Activities

(1) 1st Seminar (1

st Steering Committee)

Date: 29 October 2014

Venue: Board Room of BPDB at Buddyut Bhaban, Dhaka

Discussion Point: Explain for Inception Report

Establishment of Steering Committee (SC) and the Working Group (WG) for the Survey.

Explained the survey objectives, methodologies, member, and implementation schedule

(2) 2nd

Seminar (2nd Steering Committee)

Date: 4 Jun 2015


Discussion Point:

Primary Energy Balance for Power Sector

Power Demand Forecast

Power Development Plan


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1-18

(3) 3rd

Seminar (3rd Steering Committee)

Date: 15 December 2015


Discussion Point:

Project Outline

Primary Energy

Power Demand Forecast and Power Development Plan

Power Quality

Operation and Maintenance (O&M)

(4) Pre- High Level Discussion Meeting (Tokyo)

Date: 5 Apr 2016

Venue: TEPCO Headquarter (Tokyo)

Discussion Point:

Economic Development

Primary Energy Balance

Power Balance

Cost and Tariff Balance

(5) High Level Discussion (Dhaka)

Date: 7 April 2016

Venue: Bijoy Hall, Bidyut Bhaban, Power Division, MoPEMR

Discussion Point:

PSMP 2010/2016 comparison

Macroeconomic Projection & Industrial Policy


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Energy Balance Strategy

Energy Efficiency Target Setting & Supply-Demand Balance

Power Balance Strategy

A Project Outline and Road Map

(6) 4th Seminar (4th Steering Committee)

Date: 18 June 2016

Venue: Bijoy Hall, Bidyut Bhaban, Power Division, MoPEMR

Discussion Point: Explain for Draft Final Report



Power Balance


(7) Official comments meeting for Final Report (FR)

Date: 1,2,4 August 2016

Venue: TEPSCO Headquarter (Tokyo)

Discussion Point:



Power Balance


(8) Official comments meeting for Final Report (FR)


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1-20

Date: 7 September 2016

Venue: TEPCO Headquarter (Tokyo)

Discussion Point:

Continuous Technical Support for Post-PSMP2016


Final Report

1-21

Technical Focal Poits

1.6 Focal points

1.6.1 PSMP 2010 Review

(1) Economic Development

Table 1-3 and Figure 1-3 compares the actual performance of GDP growth rate with the projected

growth rate in PSMP 2010 and the target of GDP growth rate in the Sixth Five-Year Plan that was set

forth by the GOB in 2011. During the period of the Sixth Five-Year Plan, Bangladesh achieved annual

average of 6.3% growth rate. This was higher than the actual growth rate in each of the past five-year

plans (1st-5

th) and the result implies that the country started taking a path of rapid economic growth.

However, the economic growth rate still underperformed the target of the Sixth Five-Year Plan

(average 7.3% growth) every year and the gap was widened in the later years. The actual growth rate

was also lower than the projection of PSMP2010 that expected the Bangladesh economy to attain 7%

growth. The main factor of this gap is supposed to be the delay of economic reforms for inducing

further economic growth. The country may not be able to fully reap the opportunity of economic

development and the growth rate may continue underperforming the government’s expectation unless

economic policies to promote the development are not in place as planned.

Table 1-3 PSMP2010 Review (Economic Development)

FY

GDP Growth Rate (real price)

PSMP2010

Projection

6th Five-Year

Plan Actual

[%] [%] [%]

2009/10 5.5% - 5.6%

2010/11 6.7% 6.7% 6.5%

2011/12 7.0% 6.9% 6.5%

2012/13 7.0% 7.2% 6.0%

2013/14 7.0% 7.6% 6.1%

2014/15 7.0% 8.0% 6.6%

Average 6.9% 7.3% 6.3% Source: JICA Survey Team

Note: the average in the table is the five-year average from FY2010-2011 to FY2011-2012


Figure 1-3 PSMP2010 Review (Economic Development)

6.7%7.0% 7.0%

7.0% 7.0%7.0%

6.7% 6.9%

7.2%7.6% 8.0%

5.6%

6.5% 6.5%6.0% 6.1%

6.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

GDP Growth Rate (real)

PSMP2010 Projection

6th Five-year Plan

Actual

5.5%

6.7%7.0%

7.0% 7.0%7.0%

6.7%6.9%

7.2%7.6% 8.0%

5.6%6.5% 6.5%

6.0% 6.1%

6.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15


PSMP2010 Projection

6th Five-Year Plan

Actual

5.5%

6.7%7.0%

7.0% 7.0%7.0%

6.7%6.9%

7.2%7.6% 8.0%

5.6%6.5% 6.5%

6.0% 6.1%

6.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15


PSMP2010 Projection

6th Five-Year Plan

Actual


Final Report

1-22

(2) Domestic Coal Production

Table 1-4 shows the performance and the forecast of coal production in PSMP2010 and Figure 1-4

shows them by chart. Annual production of 1 million tones will be possible using existing facilities.

New longwall mining equipment called LTCC (Longwall Top Coal Caving) for thick coal seams was

introduced in May 2013 from China and the mining height was increased from 3 meters to about twice

this. Actual mining height is not clear, but mining efficiency was obviously improved. The coal

production in 2013/14 achieved 0.947 million tons. However, in 2014/15, the figure decreased to

0.676 million tons. The main reason for this was a delay in the withdrawal and installation of the new

equipment on-site. It is normal for people to take time to become skilled in the use of new equipment.

If they can master the operation technology of the new facilities, it is surmised that 1,000,000t is quite

possible.

Table 1-4 PSMP2010 Review (Coal Supply)



Figure 1-4 PSMP2010 Review (Coal Supply)

PSMP2010

PlannedActual Gap

[1000tons] [1000tons] [%]

2009/10 705

2010/11 667

2011/12 1,000 835 84%

2012/13 1,000 855 86%

2013/14 1,000 947 95%

2014/15 1,000 676 68%

Average 1,000 781 83%

FY

Coal Supply


Final Report

1-23

(3) Gas Supply

Five year gas supply projection in the PSMP2010 was reviewed against the actual supply records from

2009/10 through to 2014/15. The results show that the actual supply figure is 15 points lower than that

of the projected figures. The projection was made based on the gas reserve data by Hydrocarbon Unit

(HCU) (2011); however, the projection did not reflect the gas field development plan or investment

plan for new and/or existing gas fields after 2010/11. There are also differences in gas reserve data

between Hydrocarbon Unit (HCU) (2011) and USGD/Petrobangla. Hydrocarbon Unit (HCU) (2011)

uses P90/P50/P10 while USGD/Petrobangla uses P95/Mean/P05 for gas reserve assessment, hence the

USGD/Petrobangla gas reserve appears smaller. The difference between the projection and actual is

considered as a combination of all these factors.

Table 1-5 PSMP2010 Review (Gas Supply)

Source: JICA Survey Team, based on the HCU and Petrobangla data

Source: JICA Survey Team, based on the HCU and Petrobangla data

Figure 1-5 PSMP2010 Review (Gas Supply)

PSMP2010

PlannedActual Gap

[mmsfd] [mmsfd] [%]

2009/10 1,995 1,929 97%

2010/11 2,225 1,942 87%

2011/12 2,673 2,038 76%

2012/13 2,636 2,195 83%

2013/14 2,765 2,247 81%

2014/15 2,730 2,441 89%

Average 2,504 2,132 86%

FY

Gas Supply


Final Report

1-24

(4) Power Demand and Power Development Plan

The figure below shows the five-year power demand forecast in PSMP 2010 and the actual power

demand. When PSMP 2010 was formulated five years ago, the demand was estimated to increase to

around 10,000 MW by 2015. However, the actual demand in 2015 was approx. 80% of the estimate,

around 8,000 MW.

The increase in the power demand including potential demand driven by the rapid economic

development in recent years is expected to continue. The shortage of supply is considered to be the

main cause of the continuation of this imbalance between the supply and demand. The figure below

shows that the actual outputs of the gas and coal thermal power generation were only at 40% and 60%

of the outputs described in PSMP 2010, respectively. In the case of the coal thermal power generation,

a very important base load power source in the energy mix, while the output in 2015 was forecast at

1,850 MW in PSMP 2010, even the construction of coal power plants has not been commenced five

years after the formulation of the plan. The lack of integrated planning and implementation of the

construction of large-scale port facilities indispensable for the stable import of fuel and the

construction of the power plants and the increased difficulty in fundraising for such a large-scale

infrastructure development are considered to be major factors for the failure to develop power

generating facilities as planned.

Therefore, it is considered necessary for the Energy Division and the Power Division to develop an

organizational structure and operating system more integrated than before and take concerted

measures to formulate a joint infrastructure development plan, to raise fund in the public-private

partnership and to develop infrastructure systematically for the achievement of the stable energy

supply, a source of the future economic development.


Figure 1-6 PSMP2010 Review (Power Development Plan)


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1-25

1.6.2 Economic Development Policy

(1) Current Status and Issues

Bangladesh’s economy has seen steady growth since independence was declared in 1971. GDP per

capita has been steadily expanding since the 1990s, when the ready-made garments (RMG) sector

emerged as a major export industry for the country. GDP annual growth rate during the Sixth

Five-Year Plan from 2011 to 2015 averaged 6.3%. According to the Seventh Five-Year Plan

formulated by the Government of Bangladesh, the average GDP growth rate from 2016 to 2020 is

expected to reach 7.4%.

Based on this, the JICA Survey Team conducted Bangladesh’s economic forecasting up to the year

2041 and the result is summarized in the following table. This projection assumes that Bangladesh’s

economy continues to grow as projected in the Seventh Five-Year Plan during the first half of the

2020s, and GDP growth rate is expected to become moderate after the mid-2020s, when the country’s

economic development reaches a certain level of maturity. Bangladesh’s economy will continue to

grow steadily so that its GDP per capita (nominal base) is expected to reach 10,993 US$ in 2041.

According to the income classification by the World Bank, Bangladesh will become a member of the

upper-middle-income economies in the 2020s and will get close to the high-income economies by

2041 if the economic development is achieved as projected.

Table 1-6 Projection of GDP and GDP per capita up to 2041

2010 2015 2020 2025 2030 2035 2041

GDP (million USD) *1

93,236 126,630 181,282 258,598 351,109 453,642 587,665

GDP Growth Rate (p.a.) *1

6.1% 6.3% 7.4% 7.4% 6.3% 5.3% 4.4%

GDP per capita (USD) *1

615 787 1,063 1,444 1,883 2,357 2,970

GDP per capita (USD) *2

760 1,207 1,998 3,270 5,060 7,396 10,993

Note: Average growth rate is a five-year average except in the column for 2041, which is a six-year average.

*1: Real Basis at 2005 price

*2: Nominal Basis


Until now, Bangladesh’s economic growth has been maintained by labor-intensive industries such as

the garment industry. However, heavy dependence on these industries is not sufficient to sustain

further economic growth on a long-term basis. It is necessary to achieve industrial structural changes

in Bangladesh by diversifying industries and to foster high value added industries by implementing

proactive industrial policies.

Present value added by sub-sectors in the manufacturing sector of Bangladesh is shown in the figure

below. The textile industry is the largest in the manufacturing sector and accounts for approximately

60% of the total value added in the sector. In addition, there exist other industries such as “machinery

and parts”, “processed foods”, “plastic products” and “metal products” in the manufacturing sector,

but these industries’ share in value added is still limited. These industries may possibly change the

industrial structure of Bangladesh’s economy.


Final Report

1-26

Note: (p) indicates “provisional”.

Source: Prepared by JICA Survey Team referring to BBS “Bangladesh National Account Statistics: Sources and Methods

2013-14”

Figure 1-7 Value Added by Large and Middle Scale Manufacturing Industries

The following figure is a conceptual illustration of Bangladesh’s future industrial development up to

2041. While Bangladesh’s economy will continue to depend greatly on traditional industries, namely

the RMG, jute and leather industries, until the beginning of the 2020s, new industries will grow

gradually. Export items are expected to become diversified, such as light engineering products,

processed foods and pharmaceutical products. From then on, i.e. toward 2041, this diversification will

expand to higher value added new industries and products such as electronics, information and

technology/software, automobile parts, machinery and shipbuilding.

To achieve such industrial development, it is necessary to implement various industrial policies

including incentives for foreign direct investment, infrastructure development and industrial human

resource development.


Figure 1-8 Illustration of Industrial Development in Bangladesh Toward 2041

(2) Targets to Achieve

Achieve high economic growth rates with an average annual growth rate of 7.4% until 2025 and

become a member of upper-middle-income economies (at a GNI (Gross National Income) per

capita of 4,126 US$ or more) in mid-2020s.

Maintain high economic growth from 2025 onward and achieve GDP per capita equal to that of

high-income economies (at a GNI per capita of 12,736 US$ or more) by 2041.

Food, Beverage, Tobacco

6.6%

Textile60.5%

Foot ware3.1%

Saw Milling, Wood Products and Furniture

& Fixtures1.6%

Paper and its product, Publishing, Printing

1.3%

Petroleum, chemical, Rubber and Plastic

products4.0%

Glass and Non-Metalic Mineral Products

8.0%

Iron, Steel and Non-Ferrus Metal Products

3.1%

General Machine, Electric Machine,

Products and Parts0.5%

Transportation Machine, Parts and

Accessaries10.3%

Jute and Jute Goods(70% of export;1981)

RMG(８0% of export;2015)

Diversification of Export

Light EngineeringAgro ProcessingPharmaceuticals

2021 2041

ElectronicsICT/SoftwareAuto PartsMachinesShipbuildingPetrochemical and Steel


Final Report

1-27

Foster high value-added industries and facilitate export-oriented industrialization so as to achieve

high economic growth rates. Toward this end, implement appropriate industrial policies according

to the stage of industrial development.

(3) Roadmap

It is estimated that Bangladesh is currently on the way to Phase 2 of the following industrialization

process and is likely to move toward Phase 3. To maintain long term economic growth without stalling

current favorable economic conditions, it is necessary to implement the following measures for further

advancement of domestic industries.

Short and medium term: incentives for foreign direct investment; various infrastructure

developments such as construction of industrial parks like SEZ, ports, roads, railways and power

plants.

Medium and long term: construction of industrial parks; facilitation of infrastructure

development; industrial human resource development such as development of skilled labor force;

promotion of deregulation and economic liberalization.


Figure 1-9 Stages of Industrial Development and Necessary Policy Measures to Support This

1.6.3 Primary Energy


Based on the aforementioned economic growth outlook, energy consumption outlook by sector until

2041 was studied. Final energy consumption outlook and the sectoral breakdown in the BAU scenario

without considering the effects of energy-saving measures are indicated in the figure below.


Figure 1-10 Projection of Final energy Consumption (BAU Scenario)

With the rapid advancement of industrialization in Bangladesh, it is expected that there will be a shift

Agro Production

Phase 1

Import SubstitutionIndustrialization

(Easy Substitution/Light Industry)(Labor Intensive Industry)

Phase 2

Export OrientedIndustrialization

(Labor Intensive Industry)

Phase 3

Export OrientedIndustrialization(Technology & Capital

Intensive Industry)

Support Policy Support Policy Support Policyinfant industry protection-high tariff-restrictions on imports

Incentives to FDISEZ, EPZDevelop infrastructure

Skilled labor developmentLiberalization & relaxation of regulations

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

[kto

e]

Residential Industry Commercial and public servises Transport Agriculture etc. Non-energy use

Projection


Final Report

1-28

in the industrial sector from labor-intensive industries like RMG to energy-intensive industries. As a

result, energy consumption in the industrial sector is expected to increase rapidly. In addition, in the

transport sector, as growth in GDP per capita is expected to facilitate vehicle ownership from the

middle of the 2020s onward, it is estimated that energy consumption in the transport sector will

significantly exceed that of the residential sector in the future.

It is estimated that the average annual growth rate of total final energy consumption including the

aforementioned two sectors will be 6.3% between 2014 and 2041. According to this BAU scenario, the

growth in energy consumption will slightly exceed the GDP growth rate (annual average real GDP

growth rate is 6.1%). Though total energy consumption per GDP tends to decrease until the middle of

the 2020s, it is expected to turn upward and, in 2041, reach the same level as the actual figure in 2014

(3.42 toe/million BDT).

For the purpose of relieving rapid growth in energy consumption in Bangladesh in the future, “Energy

Efficiency and Conservation Master Plan up to 2030” (EECMP) was formulated in March 2015,

supported by JICA. In light of the survey results from EECMP and based on the assumption that

measures proposed in the Master Plan will be properly implemented, it is estimated that total energy

consumption per GDP will decrease as follows in the Energy Efficiency Scenario. The difference

between the figure in this Scenario and the target set in the EECMP (energy consumption per GDP in

2030 is -20% compared to 2014) was due to the difference in definition. For example, calculation in

this Scenario considered the transport sector, which was not included in the EECMP’s calculation. If

calculation is carried out on the basis of the same definition, energy consumption per GDP in 2030 is

-20% and that in 2041 is -23% compared to 2014.

2.65 toe/million BDT as of 2030 (decrease of 23% compared to 2014)

2.56 toe/million BDT as of 2041 (decrease of 25% compared to 2014)


Figure 1-11 Projection of Final Energy Consumption (Energy Efficiency Scenario)

The projection of primary energy supply calculated based on this is shown in the following figure and

table (in the case of Scenario 3 among the five scenarios that are discussed in Chapter 12). Average

annual primary energy supply will grow at a moderate rate of 4.8% up to 2041. However, in addition

to significant growth in energy supply from coal and renewable energy, which is mainly used for

power generation, energy supply from oil slightly exceeds the average figure due to increasing demand

in the transport sector.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

[kto

e]

Residential Industry Commercial and public servises Transport Agriculture etc. Non-energy use

Projection


Final Report

1-29


Figure 1-12 Projection of Primary Energy Supply – Scenario 3

Table 1-7 Projection of Primary Energy Supply – Scenario 3



Based on the assumption of introducing energy-saving measures proposed in EECMP, GDP

intensity of total energy consumption will decrease by 23% in 2030 compared to 2014 (-20% if

calculated based on the same definition as EECMP) and will decrease by 25% in 2041 compared

to 2014 (-23% if calculated based on the same definition as EECMP).

To attain the above goal, the aim is to achieve reductions in energy consumption of 16% in 2030

and of 28% in 2041 compared to the BAU scenario.

Though energy saving in the transport sector was not taken into consideration in EECMP, it needs

to be noted that motorization will be accelerated significantly due to income growth. As a result,

energy consumption in this sector is expected to expand dramatically. To achieve the above goal,

the aim is to realize a reduction in energy consumption in the transportation sector of 33%

compared to the BAU scenario.

(3) Roadmap

Primary Energy Sources 2014 2041 Annual growth

rate (‘14-’41) ktoe (share) ktoe (share)

Natural gas 20,726 (56%) 50,149 (38%) 3.3% p.a.

Oil (Crude oil ＋ refined

products） 6,263 (17%) 32,153 (25%) 6.2% p.a.

Coal 1,361 (4%) 26,273 (20%) 12.7% p.a.

Nuclear power - - 11,942 (9%) -

Hydro, solar, wind power and

others 36 (0%) 197 (0%) 6.5% p.a.

Biofuel and waste 8,449 (23%) 4,086 (3%) -2.7% p.a.

Power (import) 377 (1%) 6,027 (5%) 10.8% p.a.

Total 36,888 (100%) 130,827 (100%) 4.8% p.a.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2000 2005 2010 2015 2020 2025 2030 2035 2040

[kto

e]

Coal

Natural gas

Crude oil & Oil products

Projection

Biofuels and waste

Nuclear

Energy import


Final Report

1-30

To implement the Action Plans proposed in the EECMP.

Energy management system (targeted for demand in the large-scale industrial sector and the

commercial sector)

Performance labeling and minimum performance standards for electrical appliances (mainly

targeting energy demand in the residential sector)

Implementation of energy-saving construction standards (i.e. revised BNBC)

Low-interest loan programs for the installation of EEC equipment

In the transport sector, not only the improvement of fuel consumption efficiency for passenger

vehicles but also the improvement of traffic conditions in urban areas (within Dhaka city), which are

affected by chronic heavy traffic congestion, needs to be considered.

Policy measures for improvement of passenger vehicles’ combustion efficiency (e.g. eco car

program)

Improvement of road network development in urban areas (e.g. road widening, construction of

flyovers)

Development of railway network (e.g. MRT development within Dhaka city, Dhaka-Chittagong

railway network development)

1.6.4 Natural Gas (Domestic)


Natural resources, if used, will run out someday. This also applies to natural gas in Bangladesh.

Recoverable Proven reserve of natural gas in Bangladesh is 20.8 TCF. 12.1 TCF had been produced

and consumed by 2014, and therefore the remaining gas reserve will be 8.7 TCF, corresponding to a

Reserve Production Ratio of 9.5 years.

Source: Field-wise natural gas reserve estimates (Petrobangla, Nov. 2014),

and Draft Five Year Gas Supply Strategy 2015-2019) Figure 1-13 Gas Resource Balance

From an international economic point of view, the people of Bangladesh should recognize the true

value of domestic natural gas. They need to maximize its recovery and use it efficiently.


Final Report

1-31

In the area of oil and gas field development, significant technological advancement has been made

since 1990, and oil and gas recovery has improved significantly. Gas development in Bangladesh

needs to benefit from such advancement and to introduce some mechanism to take advantage of it.

Bangladesh has invited IOCs (International Oil Companies) for offshore development; however, it has

not been particularly interested in working with technologically advanced and financially sound IOCs

for onshore gas field development.

In order to maximize the recovery of gas from onshore fields and develop them more efficiently, it is

important to invite these IOCs for onshore gas development. Existing PSC should be amended to

attract such IOCs. International tenders to be carried out under the revised PSC, and partnerships

between domestic production companies (BAPEX, BGFCL, and SGFL) and IOCs should be

encouraged.

Natural gas will run out someday. The role of BAPEX should be changed to allow it to acquire energy

asset overseas in order to contribute to energy security in future, in a similar manner to that of ONGC

in India.

Gas Use Efficiency is one of the critical issues that needs to be introduced. “Cheap gas” will not be

available in the future and gas users need to enhance their efficiency to save the country’s indigenous

gas resources. Both the Urea Manufacturing Sector and Power Sector are major gas users and have a

significant impact on the overall gas consumption.

Urea is manufactured from natural gas. The world benchmark efficiency for Urea Manufacturing is

25mcf/ton, while average efficiency in Bangladesh was 44 mcf/ton as of 2014 FY, much higher than

that of the international benchmark. Provided that the international benchmark is used in the country,

130 mmscfd of gas would be saved in manufacturing 2,375,000 tons in 2014 and this figure would

translate into the power plant equivalent of 1000 MW.

Gas Consumption for the Power Sector (under BPDB) was 337.4 BCF in FY 2014 while Power

Generation Capacity was 8,340 MW and Generated Power was 42,200 GWh. From these figures, it is

assumed that current power generation efficiency is around 38%. Provided that efficiency can be

raised to 45%, which is considered the international benchmark for a gas based power plant, Energy

gas consumption will be reduced to 285 BCF, and the difference of 52 BCF can be said to be wasted.

This is equivalent to 1,300 MW in power plant annual operation.

In addition, it appears that power generation efficiency of Captive Power is not necessarily high

enough. Further investigation is necessary but low gas efficiency is a waste of resources and some

penalty should be imposed.

It is necessary to enhance the efficiency to the international level and a supporting legal framework

and regulations need to be put in place.


1) In order to attain efficient and economical development of domestic gas resources, introduction of

technologically advanced and financially sound IOCs is considered very important. Policy and

legal framework should be reviewed and changed. A new legal/regulation scheme should be

developed by 2019.

2) Acquisition of energy resources from overseas is necessary in order to maintain and/or increase the

national energy assets belonging to Bangladesh. (Mid/Long Term)


Final Report

1-32

3) Gas Use Efficiency to be enhanced to the international level with the use of the best commercially

available technology (Short/Mid Term).

(3) Roadmap

Amendment of PSC by 2019 to attract IOCs and encourage them to make investments in

Bangladesh

- International Tender based on new PSC

- Encourage forming of partnerships between IOCs and domestic gas production

companies, i.e., BAPEX、BGFCL (Bangladesh Gas Field Company Limited), SGFL

(Sylhet Gas Field Limited)

Role of BAPEX and associated legal framework to be changed by 2019

- Acquisition of Energy resources overseas by 2028

Legal framework to enhance gas efficiency to be in place by 2019

- Efficiency to be enhanced to the international level and discourage the use of

substandard facilities.

Gas Transmission and Distribution infrastructure to be modernized by 2019

- Transmission and Distribution gas Infrastructure should be electronically mapped and

able to introduce advanced monitoring and control systems to support the efficient use of

gas.


Final Report

1-33

1.6.5 Natural Gas (LNG Imports)


Gas Production from the current domestic gas fields in 2015 was 2,500 mmcfd and will reach a peak

production of 2,700 mmscfd in 2017, then start to decline. However, Gas demand in Bangladesh

forecasts a significant increase in future. The demand and supply gap must be filled by gas (LNG)

imports. The first LNG will be introduced in 2019 at the rate of 500 mmscfd, which corresponds to

17% of gas demand. This percentage is forecast to increase to 40% in 2023, 50% in 2028, and 70% in

2041.


Figure 1-14 Gas Supply Forecast 2016~2041

Under these circumstances, gas (LNG) import infrastructure, including an LNG Import and

re-gasification terminal, and connecting pipeline to the existing transmission and distribution

infrastructure, needs to be constructed urgently to fill the supply and demand gap.

Currently, introduction of LNG via FSRU, initiated by Petrobangla, is underway, and concurrently,

construction of a land LNG terminal by Power Cell is also under discussion. It is important to

understand the difference in these systems in view of economics, construction schedule and

operational risk, and it is advisable to prepare in the Master Plan the introduction of LNG to

Bangladesh.

The economics of a land LNG Terminal require large upfront investment for land acquisition and

0

1000

2000

3000

4000

5000

6000

7000

2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041

MM

SCFD

Comparison with PSMP2010 and PSMP2015 Gas Supply Scenario

LNG Import from India

Onshore LNG

FSRU

YTF Offshore

YTF Onshire

Existing Onshore (P1, PSMP2015 survey team projection)

PSMP 2010 Low Case (Existing+YTF Onshore+LNG)

PSMP 2010 Base Case (Existing+YTF Onshore+YTF Offshore+LNG)

PSMP 2010 High Case (Existing+YFT Onshore+YTF Offshore+LNG), esp Block 11 (Netrokona), Chhatak, Two off-shore bid rnds,

Actual Supply (2009-2015)


Final Report

1-34

infrastructure construction; however, gas handling capacity can be increased with the increase in

demand with minimum cost and schedule. Unit operation cost will be lower with the increase of

handling volume. It is also important to note that larger size tankers can be used for LNG delivery and

this will benefit the land LNG Terminal by reducing the unit transportation cost.

In view of the construction schedule, a Land LNG terminal requires 10 years including land

acquisition and the associated re-settlement plan. FSRU requires less than 3 years for commercial

operation.

It should be noted, however, that the current FSRU project in Bangladesh would require more than 60

times’ the LNG delivery using Ship to Ship Transfer, and would be vulnerable to weather conditions.

LNG Terminal Capacity will be expanding and transmission capacity of the pipeline infrastructure

from LNG terminals to the existing distribution infrastructure may need to be studied in advance.

Sending out gas pressure at the terminal should be studied to allow the use of higher pressure for gas

transportation, eliminating booster compressors downstream. Higher pressure in the system will

impact existing gas systems and well head separation performances. The LNG Master Plan should be

prepared to optimize and solve potential operational issues.

Fluidization of LNG supply has started already and the inflexible Take or Pay Contract has been an old

legacy in US and Europe. On the other hand, Asia has suffered from an expensive gas pricing system

known as the Asian Premium. It is important to tie up with other LNG importing Asian nations and

consider the introduction of spot procurement, and discuss product exchange (trading) among the LNG

importing nations. It is advisable to own a slightly larger storage capacity and loading facility for

re-export. Terms of sales/purchase agreements for LNG are not simple. It is important to set up a

strategy taking the above into consideration.

It should be noted that the current LNG price is about ten times higher than that for Bangladesh’s

domestically produced and marketed gas, where the current gas price for the electric power sector is

1.02 USD/Mcf and that for the fertilizer sector is 0.94 USD/Mcf. In the near future the dependence on

LNG over the total gas supply will sharply increase, and the dependency on LNG is projected to

exceed 70% of the total gas supply in the year 2041. Domestic Gas prices need to accommodate the

LNG price. Under these circumstances, existing fertilizer manufacturing facilities will not be able to

produce economically competitive product and the power price from old existing facilities will not be

able to compete economically with higher efficiency facilities. Similarly, more attention should be

given to gas leaks and system loss from gas transmission and distribution infrastructure to prevent

economic loss, i.e., “the lost opportunity cost”.

It is very important to review the integrity of the existing infrastructure, and swiftly introduce an

electronic mapping system with object orientated features as a first step.


1) Land LNG Terminal: Commence 500mmscfd of gas supply in 2027, expanded to 2,000mmscfd in

2041

2) FSRU Phase 1: Commence gas supply of 500 mmscfd in 2019, and additional 500 mmscfd as Phase

2 in 2023

(3) Roadmap

Master Plan for LNG Introduction to be prepared and completed by end of 2017, covering

economic analysis, construction schedule, operational risks, energy security, and international

cooperation (including joint LNG infrastructure operation)

Initial land-based LNG terminal commences operation in 2027, supplying 500mmscfd of natural

gas. The terminal is expanded to supply 3,000 mmscfd gas in 2041.

FSRU Phase 1 and connecting pipeline to be completed and start supplying 500 mmscfd of gas in

2019

Impact of LNG introduction on existing gas infrastructure and gas field facilities to be

investigated and reinforcement plan to be prepared by 2019

LNG Procurement Strategy to be prepared by 2018.


Final Report

1-35

1.6.6 Coal

In this section, the infrastructure for import coal and domestic coal development is considered.

(1) Current Situation and Issues

(a) Infrastructure for import coal

1) As for the quantity of import coal in 2041, 60 million tons is expected.

2) Because the infrastructure for import coal is closely related to handling cost, it is left to the

consideration of each power station plan at present. There are some options such as Coal Center +

Barge Transport, Coal Center + Belt Conveyor Transport and Offshore Unloader + Barge Transport

etc.

3) On the other hand, a Coal Center will be a major solution playing a key role in the future because a

steady coal supply is the most critical issue for a power station.


Figure 1-15 Forecast of Coal Demand and Supply

(b) Domestic coal development

1) Coal will be the cheapest primary energy now and in the future and coal-fired power stations will

increase in Bangladesh.

2) On the other hand, the coal-fired power stations in Southern Asia surrounding Bangladesh are

increasing rapidly. As a result, the supply, the quality and the price of import coal will become very

unstable in the future.

3) From the situation mentioned above, domestic coal development will become more important than

at present in future, because high quality coal is abundant in Bangladesh.

4) The understanding of inhabitants is necessary for domestic coal development, and the government

needs to perform awareness activities in order to gain the understanding of the nation.

5) Despite the high price paid for the coal mined by the Chinese contractor, the technology transfer

from the contractor to Bangladeshi engineers has been limited. If this system of the mining

continues, the increase in coal production with the development of new underground coal mines will

not lead to the reduction in the production cost and, therefore, the stable supply of domestically

produced coal will not be realized.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

Coal Supply

Domestic Production Import Total Supply

(1,000t/y)


Final Report

1-36


(a) Infrastructure for import coal

1) Enforcement of F/S for the import coal infrastructure

2) Construction based on the F/S


1) Technology acquisition in coal mines for Bangladesh

2) Carrying out pilot operation of open cut mining technology in the Barapukuria coal mine.

3) Development permission for Digipara coal mine and Karaspir coal mine

4) Approval of small scale open cut mining at Phulbari after the pilot operation at Barapukuria coal

mine

(3) Roadmap

(a) Infrastructure of import coal

1) Implementation of import coal infrastructure in the F/S.

- The F/S for the CTT (Coal Transshipment Terminal) planned in the Matarbari area has already

been completed (Source: Preparatory Survey for the Construction and Operation of Imported

Coal Transshipment Terminal Project in Matarbari Area in People's Republic of Bangladesh as a

PPP infrastructure project).

- In this plan, phased development for CTT was recommended to provide sufficient flexibility, i.e.,

to expand the CTT when the power generation program development and realistic commission

operation date (COD) become certain.

- The first phase of the CTT will commence operation in 2025 (planned amount of coal: 10.4

million t/year); the object of the second phase will include those power stations that commence

operation by 2029 (amount of coal: 25.6 million t/year) and use the CTT.

- For the future, with an increase in the development of new coal-thermal power plants there is a

need to implement the F/S for the infrastructure and plan for efficient coal transportation.

- It will be important to conduct a F/S on the possibilities of the construction of CTT in near future

and offshore loading and unloading including an analysis of the actual record of the offshore

loading and unloading in the Bay of Bengal.

2) Based on the F/S Construction

- For CTT (Coal Transshipment Terminal), efficient coal supply operation while ensuring long-term

stability is desired. When planning in Bangladesh, it is important to take into account the natural

characteristics such as the broad expanses of sand, cyclones and high rainfall, and the protection

of precious animals and plants.

- When importing coal over a long period of time, facility planning that can respond to changes in

the type of coal is desirable as, depending on the coal mine reserves, future coal mines and

countries may change.

- The promotion of mechanization and securing of stable supply for offshore loading and unloading

by floating crane; the implementation of early construction of the CTT.


1) Because it will take about 10 years to develop a new coal mine and start production, production will

begin in 2025 at the earliest even if it is prepared now. Therefore, it is necessary to carry out the

required preparation from a position of being able to do this now due to as much utilization of the

excellent domestic resources as possible.


Final Report

1-37

2) Unfortunately, the production of Barapukuria coal mines in 2015 was 0.68 million tons and did not

reach 1 million tons as planned, but 1.1 million tons from U/G in 2020 and a total of 3.2 million

tons (1.2 million tons from U/G and 2 million tons from O/C) from 2030 to 2041 are assumed.

3) In addition, it is assumed that total production will be 1.1 million tons by 2020, 5.7 million tons by

2030 and 11.2 million tons by 2041, considering the production scenario in which Dighipara and

Kalaspir coalfields have high development possibility, including the Phulbari coalfield.

4) The acquisition of coal mine technology by Bangladesh

It should be the case that by 2020 systems have been established through which Bangladesh can

learn in technologies such as mining, ventilation and mine safety technology for stable production

in the Barapukuria coal mine, and that Bangladesh can play a key role in developing a new coal

mine.

It is considered necessary to establish an institution for training mining engineers and a third-party

organization for technology transfer, e.g. a mining college, in order to enable Bangladeshi workers

to implement and evaluate the outputs of the programs and extend of the use of transferred

technologies to other mines later in the medium- to long-term.


Final Report

1-38

1.6.7 Oil and LPG


Bangladesh’s current oil annual demand is around 5 million tons, and the self-sufficiency rate is only

5%. However, Bangladesh expects continuous economic development, and the industry sector and

transport sector demand will lead drastic oil demand growth: 6 times higher in 2041 than in 2016

(average growth rate 7.4% p.a.), even under the “Energy Efficient and Conservation Scenario”.

Bangladesh has several plans to extend or newly develop oil refineries; however, if the oil demand

grows as projected, oil imports will be mandatory to meet the demand and keep increasing.

Source: JICA “Southern Chittagong” Survey Team and PSMP2016 Survey Team

Figure 1-16 Oil Demand and Supply Balance, 2014 to 2041

Furthermore, Bangladesh’s LPG demand is only 2% of total oil demand, and less than 0.01% of the

total energy demand. However, LPG consumption is expected to grow drastically as an alternative for

households’ cooking fuel (currently domestic natural gas) and transportation fuel.

The current price of LPG is two to three times higher than that of the pipelined gas, and may not be

affordable for average households in Bangladesh. While Bangladesh rural households spend 4-7 % of

their monthly income on traditional solid biomass, LPG at the market price would be 25%. If the

government seriously intends to pursue universal access to modern energy, LPG may not be a good

solution or may need some policy countermeasures. Subsidy of LPG may work to some degree to

increase affordability; however, without sound consideration of the side effects and an exit strategy,

LPG subsidy would create huge pressure on the national coffers, given the projected future demand.

In terms of affordability, biogas could be an alternative to promote universal access to modern energy,

especially in rural areas.


The government should define a strategic position for oil products in its holistic energy policy,

and economic development policy.

The government should develop an exit strategy for oil product subsidy.

(3) Roadmap

A clear strategic positioning for oil products in the energy policy by 2017.

Exit strategy for oil product subsidy by 2017.

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

kto

n

ERL Existing Capacity ERL Capacity Expansion KPC Project

Oil Import Oil Demand


Final Report

1-39

1.6.8 Power Development Plan


As mentioned in Chapter PSMP2010 review, five-year power demand by PSMP2010 and its actual

performance had remained in about 8,000MW which is about 80% level of the plan, because it was

delayed power plant construction which had been planned and necessary infrastructure such as port

which is essential to stable fuel imports has not been established.

Therefore, it is considered necessary for the Energy Division and the Power Division to develop an

organizational structure and operating system more integrated than before. They must also make

concerted efforts to formulate a joint infrastructure development plan, to raise funds in the

public-private partnership and to develop infrastructure systematically in order to achieve a stable

energy supply, a source of future economic development.


The power demand forecast is an important factor in the formulation of a future power development

plan (PDP). However, the accuracy of the actual demand forecast is at such a level that it is difficult to

forecast even the demand for the next day accurately and, in fact, it is almost impossible to accurately

forecast the power demand for several years or longer. Because of this unreliability of the demand

forecast, it is not advisable to formulate a PDP optimal for a certain condition in future and promote

actual power development in accordance with this PDP. In other words, it is very important in

formulating a future PDP to consider all the elements, including the demand variables in the

estimation, conduct a sensitivity analysis while changing these variables within their respective

reasonable ranges for a certain system, and analyze the relationship between power generating

facilities in the system and the economic, environmental and energy security values of the system.

Therefore, a long-term vision for the power source composition created by making a rough estimation

of the future demand based on a scenario of the macro economic growth, simulating a demand/supply

operation somewhat simply using the estimated demand scenario as a variable and formulating the

optimal PDP is presented as a recommendation. The planning flow is as follows.


Final Report

1-40


Figure 1-17 Power Development Planning Flow

1) Peak Power Demand Projection

As for the methodology of peak demand projection for PSMP2016, this study adopted the “GDP

elasticity method”, which is an easier approach and thus easy for technology transfer to local

counterpart agencies who are expected to take over the work in a rolling plan. However, it has to be

noted that this methodology disregards various factors that may also affect the power demand; hence,

the results may differ significantly from other methodologies. This study therefore also tried the peak

demand projection based on the “Sectorial analysis method” to confirm the appropriateness of the

“GDP elasticity method”.

F-4 Long-term Development Plan (Candidate Plan: 2026-41)Sensitive analysis by changing Gas and Coal Power ratio (case1～5)

Supply and Demand Simulation

STEP 1 ：Optimization of Emission PowerSTEP 2 ：Maximization of Zero-emission Power

A Power Demand Forecasting

A-2 Energy-GDP Elasticity Method

Validation of two methods

A-4 Peak Power Demand Forecasting

A-1 Estimation of the maximum power that includes potential demands (Peak@2016)

Demand Side

A-3 Macro Demand Forecast Method

E-1 Estimation of daily load curve

B PSMP2010 Review

Supply Side (Power)

Daily Load Curve（Peak, Weekday & Holiday）

Supply and Demand Simulation

G Infrastructure and Port Development Plan（JICA’s southern Chittagong MP research）

B-1 Power Development Plan Review

Gas Power Development Plan

Coal Power Development Plan

F-1 Existing Facilities CapacityF-2 Decommissioning Plan

Required Capacity(Peak and Required Reserved Margin）

B-2 Primary Energy Supply Review (Gas & Coal)

G-1 Coal Terminal Development Plan

G-1 LNG Terminal Development Plan

Supply Side (Energy)

Economy EnvironmentEnergy Security

H Quantitative Evaluation of 3E

C Supply Reliability

F Power Development Plan

Existing Facilities Information（Output, Retirement, Efficiency, Property）

New Facilities Information(Output, Retirement, Efficiency, Property, COD）Accumulated Power Development Scenario Fixed Condition

Variable Condition

E Property of Load Factor

D Fuel Price Scenario

D-1 Fuel Price Scenario (Oil, Gas & Coal)

Fuel Price Scenario (Oil, Gas & Coal)

Gas

Oil

Coal

F-3 Government Committed Plan (Committed Plan: 2015-25)

C-2 Supply Reliability Study (Adequate Reserve Margin)

Fuel Consumption

Generation Cost[USD/kWh]

CO2 Emission Cost[USD/kWh]

Study of Energy Security

Possible Supply Loss Cost [USD/kWh]

Risk of sudden shortage in energy supply

Risk of GDP Loss

Minimum 3ECost Scenario [USD/kWh]

VISION2041Desirable Future Direction of Energy Mix

Energy Mix

CO2 Price

Validation

Dem

and

Supply

Renewable Energy

NuclearPowerImport

Hydro

Maximization of Zero-emission

Power

Optimization of Emission Power Fuel-wise CO2

Emission Fuel-wise MW, GWh


Final Report

1-41

(a) Estimation of the maximum power that includes potential demands

Because of the particular situation in Bangladesh whereby rolling blackouts have been used as a

measure to circumvent power shortages at the peak hours, the recorded maximum power consumption

does not include such potential power demand. Therefore, an accurate forecast of the maximum

demand including the potential demand requires a theoretical estimation of load curves from the daily

operational data with particular attention on the characteristics of the seasonal changes in the daily

load curve and the frequency and durations of rolling blackouts.

Because rolling blackouts have been relatively rare on weekends and holidays in the winter (between

November and January), a daily load curve gives an actual peak load (at the hours of the peak power

consumption for lighting) that is quite accurate. A daily load curve in the summer gives estimates of

the base and intermediate loads close to the recorded values.

Therefore, a composite daily load curve representing the peak power demand was created from the

daily load curve in the summer with part of the peak hours replaced by the same part of the daily load

curve in the winter as shown in the figure below. The peak power demand in FY 2014, which was used

as the baseline for the peak demand forecast, was set at 8,039 MW by adding the base and

intermediate load in the summer (5,487 MW and 1,043 MW, respectively) and the peak load in the

winter (1,811 MW) recorded in FY 2015. The peak power demand in FY 2016 was estimated at 8,921

MW in the same way and this value was used as the reference value in the peak power demand

forecast.

Source：JICA Survey Team

Figure 1-18 Estimated Composite Daily Load Curve in the Summer in Bangladesh

(c) Verification of GDP elasticity method by using Sectorial analysis method

In comparing the power demand projection between the “GDP elasticity method” and the “Sectorial

analysis method”, this study concluded that the results are almost identical, though the latter exceeded

the former by about 5%. Therefore, this study adopted a peak demand projection using the "GDP

elasticity method”, which is an easier approach and thus easy for technology transfer to local

counterpart agencies who are expected to take over the work in a rolling plan.


Final Report

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Figure 1-19 Comparision of peak power demand in both models

(d) Integration of Peak Power Demand Projection and Energy Supply-Demand Projection

Following the projection of peak power demand as formulated above, this study calculated the

available electricity supply from the power grid by multiplying the annual load factor, and then

compared this with the projection of total electricity consumption that was discussed in the previous

section in the projection of primary energy supply and demand.

2) Power DevelopmentPlan

Short-term and medium-term power development plans are to be formulated after verifying the

appropriateness of matters with a little short-term uncertainty (the state and retirement plans of the

existing facilities and the plans approved by the Government) in the formulation of a long-term power

development plan. The basic CODs of the gas and coal power plants in the long-term and candidate

plans are to be determined in conformity with the port and fuel depot infrastructure development plan

to be formulated separately in the “Data Collection Survey on Integrated Development for Southern

Chittagong Region (Southern Chittagong MP Survey).”

The optimum power source composition is to be determined in the preparation of the future vision of

the power source composition by conducting a quantitative evaluation of the economic, environmental

and energy security (3E) values of scenarios with different composition ratios for the gas and coal

power generation. Different composition ratios for the gas and coal power generation within ranges

that are consistent with the infrastructure development plan in the Southern Chittagong MP Survey are

to be used in the scenarios, particularly for the highly unpredictable periods for the long-term and

candidate plans.


Final Report

1-43


Figure 1-20 Relationship between the Time Scale and the Change in PDP

(a) Existing plants

The installed capacity of existing plants was determined as described below after discussions with the

organizations concerned in Bangladesh. The installed capacity of existing plants is 10,895MW as of

2015.

(b) Retirement Plan

The lists of the existing power generation facilities above show their outputs, CODs, retirement years

and operation periods. Analysis of these data has revealed that the average operation period for these

power plants is approximately 20 years. It is difficult to improve the efficiency of the existing

inefficient plants significantly because of the large cost required for such improvements. For these

reasons, it has been concluded that the retirement plans prepared by the government are appropriate.

The adoption of a strategy aiming at improving the efficiency of the entire power supply network by

retiring the existing inefficient power plants gradually and replacing them with new, efficient facilities

is considered essential for realizing the maximum use of the limited resources.

(c) Evaluation of the Plans Approved by the Government (Committed Plan)

Power plants with a total output capacity of approximately 14,000 MW are to be constructed in the

next ten years. The current status of each thermal power development plan was confirmed based on the

discussion with related companies, such as BPDB, BIFPCL, CPGCBL, NWPGCL, Orion Group, etc.

(d) Consideration of Consistency with the Southern Chittagong MP Survey

Guarantee of the long-term stability of the fuel supply is a very important factor in the formulation of a

power development plan. The existence of a port infrastructure required for the importing of fuels

including gas and coal during operation has to be a precondition for the decision on the CODs of new

power plants, in particular. Therefore, the infrastructure and port development plan formulated with

the consent of the Government of Bangladesh in the Southern Chittagong MP Survey, implemented by

JICA, was used as reference in this analysis and the CODs of the power supply facilities were set in a

way consistent with the plan.


Final Report

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(e) Evaluationb of the Ultra-long term Power Development Plan (Candidate Plan)

A study on increasing the power sources by changing the ratios of the gas and coal power generation

in accordance with the progress in the infrastructure and port development planned in JICA’s Southern

Chittagong MP Survey is to be conducted for the formulation of the candidate plan. In this section, a

scenario that sets the composition ratios of the gas and coal power generation in 2041 at 35% is to be

used as the basic power development plan.

(f) Summary of Power Development Plan

The figure below shows the power supply plan formulated by adding the capacity of the existing

plants estimated with the retirement plan in the plan for the existing facilities taken into consideration

(existing capacity), the capacity of the plants mentioned in the Committed Plan to be constructed by

2025, the capacity of the plants to be constructed later in the Candidate Plan that is subject to changes

and the capacity required to ensure supply reliability during peak demand.

PowerDevelopment Plan (Base case) Power Development Plan (Base case)

Gas Coal

Oil Hydro

0

10000

20000

30000

40000

50000

60000

2015 2020 2025 2030 2035 2040

(Source: JICA PSMP2015 Team Estimate)

Power Development Plan (MW) @ Scenario3 : Coal 35% Gas 35%

Oil Hydropower

Gas Coal

Power Import Nuclear

Power Demand Required Supply

0

5,000

10,000

15,000

20,000

2015 2020 2025 2030 2035 2040

Gas-based Power Plants (MW)

New Gas-based Power Plants (Candidate)

New Gas-based Power Plants (Committed)

Existing Gas-based Power Plants

0

5,000

10,000

15,000

20,000

2015 2020 2025 2030 2035 2040

Coal-based Power Plants (MW)

Matarbari/Maheshkhali

Rampal/Payra

Other Areas

Barapukria(Domestic Coal)

0

5,000

10,000

15,000

20,000

2015 2020 2025 2030 2035 2040

Oil-based Power Plants (MW)

New Power Plants

Existing Power Plants

0

2,000

4,000

6,000

8,000

10,000

2015 2020 2025 2030 2035 2040

(Source: JICA PSMP2015 Team)

Hydro Power (MW)

New Kaptai PSPP

Existing Kaptai


Final Report

1-45

Power Import Nuclear


Figure 1-21 Annual Trend of Each Power Plants（MW）

3) Simulation of Supply/Demand Operation

(a) Preconditions for the Estimation of the Economic and Environmental Values

(a-1) Daily load curve

The following estimates the daily load curve in Bangladesh during the 2015-2041 period. The

performance records of the daily load curve in Bangladesh in 2015 are represented by a curve having a

power demand peak in the evening, as illustrated below. In the meantime, by 2041, the economic

growth rate in Bangladesh is estimated to reach the daily load curve of advanced countries, where the

peak is found in the daytime and evening, if the growth of the electrification rate is taken into account.


Figure 1-22 Transition of estimated power demand during 2015-2041 (Unit: MW)

(a-2) Power supply reliability

An analysis was conducted on the relationship between the reliability of power supply and the

required capacity based on the power demand forecast (Base Case) and PDP. The relationship between

the reserve margin and LOLE changes from year to year. If the value of LOLE is set at the standard

value for developing countries of 1.0 to 1.5%, the reserve margin theoretically appropriate for the

current state is approximately 25%. If international linkage and nuclear power generation are to be

introduced ca. 2025, the reliability of the power supply shall have to be improved, as mentioned in

detail in the chapter on power quality. A margin of between 8% and 15% will be required in order to

achieve the target of LOLE = 0.3%, which is acknowledged to be a very challenging target. Therefore,

it was assumed that the reserve margin shall be reduced from 25% in 2020 to the target of 10% by

2030 and shall be maintained at this level thereafter.

0

2000

4000

6000

8000

10000

2015 2020 2025 2030 2035 2040

(Source: JICA PSMP2015 Team)

Power Import from Neighboring Countries (MW)

From Bhutan (Rawta)

From Meghalaya (Bibiyana)

From Myanmar(Cox's Bazar)

From AP/Bhutan(Barapukuria Case3)

From AP/Bhutan (Barapukuria Case2)

From Tripura (Comilla)

From WB (Bheramara HVDC)

0

2,000

4,000

6,000

8,000

10,000

2015 2020 2025 2030 2035 2040

(Source: BPDB, JICA PSMP2015 Team Estimate)

Nuclear Power (MW)

South West Nuc 6th Unit

South West Nuc 5th Unit

Roopoor 4th Unit

Roopoor 3rd Unit

Roopoor 2nd Unit

Roopoor 1st Unit


Final Report

1-46


Figure 1-23 Reserve Margin

(a-3) Fuel Price Scenarios

The differences between the prices of fuels in Bangladesh, including the price of domestically

produced gas in particular, and the prices in the international market are large and fuel in Bangladesh

is provided at prices significantly lower than those in the international market. As the future economic

growth will inevitably make it impossible to satisfy the power demand with domestically produced

resources, the proportion of imported fuel in the fuel supply is expected to increase rapidly and the

prices of fuel are expected to increase to close to those in the international market.

In the discussion with the Government of Bangladesh and the IEA, the international organization on

energy, it was decided to use the IEA Scenario for the price of crude oil that projected the price on the

basis of a very long-term projection of the supply/demand balance in this analysis.

However, there is a difference between the market price of crude oil in the IEA scenario and the actual

price in the market in Bangladesh at present. Therefore, an original scenario for this analysis (F5) has

been formulated as the basic scenario for the price of crude oil. In this scenario, the reference price is

set at the average price of crude oil in the domestic market in 2015 and the price is projected to follow

the New Policies Scenario of the IEA (F1) from 2020 onward.

0%

5%

10%

15%

20%

25%

30%

2015 2020 2025 2030 2035 2040

(Source: JProposed by ICA PSMP2015 Team)

Reserve Margin Condition (%)


Final Report

1-47


Figure 1-24 IEACrude Oil Scenario

(b) General description of Supply/Demand Operation Simulation

The estimation with the least cost method was used in the quantitative evaluation of the optimum

power development plan. A good balance of the economic, environmental and energy security values

based on the primary energy supply/demand balance, PDP, power system analysis and power system

operation was taken into account in the evaluation. The results of the evaluation were reflected in PDP.

PDPAT II and WASP IV were used as the tools for the simulation of supply/demand operation in the

formulation of PDP, which was implemented in accordance with the flowchart shown in the figure

below.

The annual fuel cost for a certain year was estimated by finding the most cost-effective operation of

the given power generation facilities to satisfy a given demand of the year concerned in the simulation

of the supply/demand operation. At the same time, a comparison of the fuel cost was conducted, the

annual expenses were estimated as a total of the fixed cost, fuel cost and inter-connected cost, the least

cost operation, the most cost-effective operation of the total power system, was identified in the

simulation and the economic value of the power development plan was evaluated. The optimum

development plan was selected by comparing the estimated annual expenses with those of other

development plans.

0

20

40

60

80

100

120

140

160

2010 2015 2020 2025 2030 2035 2040 2045

USD

per

bar

rel

IEA Crude Oil Scenario

F1 New Policies Scenario (Base Case) F2 Current Policies Scenario (High Case)

F3 450 Scenario (Low Case) F4 Low Oil Price Scenario

F5 PSMP2016 Revised Scenario (F1)


Final Report

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Figure 1-25 Simulation schem of the supply/demand operation

The energy mix should be examined based on the fixed factor and the variable factor as shown in the

figure below. For the fixed factor, nuclear power plants, power imports, hydropower plants, existing

coal-fired power plants, existing oil-fired power plants, and candidate coal, gas and oil-fired plants

that the plan is already in progress should be taken into consideration. For the variable factor,

assuming that 70% of the total energy source that is considered appropriate for the power generation

plan will be covered by coal and gas, in order to study the optimum energy source composition, five

scenarios of energy mix with the share of coal and gas in the energy mix as of 2041 changed from P1

to P5 in the figure below are studied.

In this case, the share of oil and other fuels in the energy mix should not change in each scenario. The

energy mix by fuel type from 2015 to 2041 in each scenario is as shown in the following figure.


Final Report

1-49


Figure 1-26 Generation pattern in 2041

After determining the optimum share of gas and coal in the energy mix, for Step 2, changing the share

of fuels other than thermal power and nuclear power in the energy mix should be considered.


Figure 1-27 Image for demand and supply simulation

Assumptions:

●Fixed Factor: Nuclear, Dom Coal, Dom Gas, Oil, Hydro, and Power Import

●Variable Factor: Imp Coal,

Imp Gas, and Renewable Energy

Nuclear

Domestic

Coal

OilDomestic

Gas

Gas

RE Coal

Variable Factors to be scrutinized for optimum PDP

Hydro

Import

Coal/Gas

RE

STEP 2-1:STEP 1:

(70%) (60%)

Import

Coal/Gas

RE

(50%)

STEP 2-2:

PI PI PI

(15%)

Green Energy

(15%)

Green Energy

(25%)

Import

Coal/Gas

Green Energy

(35%)

(15%) (15%)


Final Report

1-50


Figure 1-28 Annual Trend of Energy Mix in Different Scenarios

(c) Estimation of Economic Value

The following figure shows the trends of five scenarios for generation cost. As the use of coal spreads

in stages, the fuel expense will be slashed, helping curve increases in power generation costs. Thus,

the power generation cost is estimated at 9 to 12 US cents/kWh for 2040. In addition, comparison of

the power generation cost between the five scenarios for energy source ratio (P1 to P5) shows that the

power generation cost becomes higher as the ratio of coal to all the energy sources becomes smaller.


Figure 1-29 Power generation cost under each scenario and Ratio of coal （US cent/kWh）


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1-51

(d) Estimation of Environmental Value

CO2 emissions in different scenarios are shown in the figure below. The CO2 emissions in 2041 are

the highest (0.82 CO2 kg-C/kWh) in Scenario P1, with a high share of coal in the energy mix, and the

lowest (0.55 CO2 kg-C/kWh) in Scenario P5, with a low share of coal in the energy mix.

Source: JICASurevy Team

Figure 1-30 Scenario-Wise CO2 Emissions（CO2 kg-C/kWh）

As discussed in Chapter 5, which analyzes the environmental policy, climate change is one of the most

critical issues among the environmental impacts of power supply. Bangladesh also submitted INDC to

UNFCCC in 2015 and projected greenhouse gas emission reductions in the power sector by 2030.

Thus, the environmental value of each power development scenario should be evaluated focusing on

CO2 emissions. This study employed CO2 cost per unit of electricity generated to evaluate the

environmental value of each power development scenario. CO2 cost is calculated by multiplying CO2

emissions and CO2 price. In this study, 125 USD/tCO2 is used for the CO2 price, referring to the

assumption in the 450 scenario of IEA World Energy Outlook 2015.

(e) Estimation of Energy Security Value

Energy security covers many concepts and there are no common approaches to evaluate it unlike

previous two values. Here, we focused on risk of sudden shortage in energy supply quantity, which

would directly damage Bangladesh economic activities. The difference ratio of coal and gas among

power development scenarios brings different dependence on supplier countries and delivery routes,

and thus different shortage risks. This energy shortage risk can be quantified in monetary value as

potential loss value of economic production.

Proposed index is calculated using the formula below.

Energy Security Index [USD / kWh]

= GDP [USD] x Possible non-delivery rate [%] / Primary Energy Supply [toe] / Generation Efficiency [kWh/toe]

To calculate “possible non-delivery rate”, we modeled physical energy delivery routes to Bangladesh

and assumed the blockage probability of each point on the routes. The following figure illustrates the

model concept. Among many kinds of risk on the energy delivery routes, we focused on three risks:

export suspension risk, blockage risk on land route, and blockage risk on sea route. We ignored the

risks to deliver domestic energy.


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Figure 1-31 Physical Energy Delivery Routes and Risks

With the model, energy delivery rate to Bangladesh can be expressed in the form of probability density

function as shown in Figure 1-31, considering many different combinations of risk realization. This

curve itself reflects the risk situation of the physical energy delivery of the country. Using the

parameter of the expectation () and the standard deviation () of this distribution curve, we can

calculate a value of () which shows minimum delivery rate with 84% confident interval

mathematically. In the other word, 1 () shows maximum non-delivery rate. This number is that

we call “Possible non-delivery rate” here.


Figure 1-32 An Example of Probability Density of Energy Delivery

3) 3E Evaluation Results in Bangladesh

Power supply is closely related with economic activities and environmental issues. For a certain

pattern of energy supply to be sustainable, it has to satisfy the conditions called “3E,” consisting of the

economic value, environmental value and energy security value. The Basic Energy Plan of Japan states

that the energy policy of Japan shall satisfy the “3E” conditions.

A quantitative evaluation of the 3E values in 2041 of each of the power development scenarios

proposed in the previous section conducted for the selection of the most recommendable scenario is

described in this chapter.

Based on the aforementioned methodologies, five scenarios of power development were evaluated

By sea

By land

(railway, truck, pipeline )

Bangladesh

Demand

By land

Supplier country

Physical Energy Flow and Risks

(1)Energy

imported by

land

(2)Energy

imported by sea

(3)Domestic energy

Risk on land route

Risk on sea route

Risk

Risk on supply side

Evaluation using supplier

countries’ risk

Evaluation the risks on

the major chokepoints

on sea route

Evaluation with

assumption that risk

are proportional to

distance

Expectation()

Standard

Deviation

()

100%

Probability

0


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using 3E indicators, as shown in the following table. All indicators are expressed in monetary values

and they indicate better performance when the number is small. The sum of these three indicators is

the total score for the 3E evaluation.

Table 1-8 3E Evaluation Results of Each Power Development Scenario

Composition

(MW base) Economy

[US cent/kWh] Environment [US cent/kWh]

Energy Security [US cent/kWh]

Total [US cent/kWh]

Scenario 1 Gas 15%, Coal 55% 11.2 6.6 9.8 27.6






Source: JICA Survey Team Source: JICA Survey Team

Figure 1-33 3E Evaluation Results (Each Value) Figure 1-34 3E Evaluation Results

(Total)

(g) 3E Evaluation including the Possibility of the Use of Renewable Energy

As mentioned above, after determining the optimum share of gas and coal in the enrgy mix, as Step2,

changing the share of renewable energy in the energy mix should be considered. In this study, RE10

scenario increasing 10% Renewable energy and RE20 scenario increasing 20% reneawable energy is

considered.

Figs. 1-33 and -34 show the 3E values of the scenarios estimated with the “3E” Evaluation Indicator

Estimation Method mentioned above. The introduction of power generation with renewable energy in

RE Scenarios 10 and 20 will lead to a significant increase in the unit power generation cost because of

the increase in the cost for its introduction.


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Table 1-9 3E Evaluation Results of Each Power Development Scenario

Composition

(MW base) Economy

[US cent/kWh] Environment [US cent/kWh]

Energy

Security [US cent/kWh]

Total [US cent/kWh]

Composition

(MW base)


Scenario 3

RE10 Gas 35%, Coal 25% 16.0 5.0 6.9 27.9

Scenario 3

RE20 Gas 25%, Coal 25% 19.2 4.7 6.2 30.2


Source: JICA Survey Team Figure 1-35 3E Evaluation Results (Each Value)

Source: JICA Survey Team Figure 1-36 3E Evaluation Results (Total)

Because the power generation cost is an economic indicator that has a great impact on the 3E

evaluation, a sensitivity analysis was conducted with different costs for the introduction of renewable

energy power generation. Fig. 1-36 shows the result of the comparison of cases in which the

introduction cost is assumed to have been reduced by 50% and 75% with the case of introduction at

the current price.

The 3E evaluation values of the scenarios with the introduction of renewable energy power generation

are lower than those of the scenario without the introduction when the cost of the introduction has

been reduced by at least 5%. Therefore, it is advisable to decide the proportion of the power supply

generated with renewable energy in the total supply with the reduction in the cost of the introduction

to be realized by technical innovation taken into account.


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Figure 1-37 3E Evaluation Results (Total)

(3) Roadmap

i) Short term (up to 2020)

Capacity building for MP revision

Collaboration between organizations for power and energy master plan

Periodic rolling revisions for milestone mater plan

Comprehensive statistical work function

Introduction of KPI management

Improvement in the investment climate

Improvement of PPA

Reinforcing tax exemption for FDI

Prompt procedure

Financial credit approval by international organization

Eliminating rolling blackouts

Reform of O&M of power plants and revision of electricity charges

ii) Short- to medium-term (up to 2025)

Breaking away from the dependence on costly petroleum and rental power generation

Promotion of PPP investment in power generation projects

Reform of O&M of power plants and revision of electricity rates

iii) Medium- to very long-term (up to 2041)

Establishment of reliable large-scale base power sources

Promotion of PPP investment in power generation projects

Reform of O&M of power plants and revision of electricity rates

Realization of the best mix of power sources with high 3E values

Regarding acchieve to best energy mix, in order to maximize the 3E value (the total of the economic,

environmental and energy security values) of the power source composition of the energy mix, a

portfolio consisting of well-balanced proportions of gas, coal and other power sources shall be realized.

This shall be done by halving the proportion of gas power generation to depart from the current heavy

reliance on gas, and with the systematic expansion of relatively inexpensive large-scale coal power

generation and international connection with the neighboring countries as an exit strategy from the

reliance on expensive oil-based rental power.

In addition, the investment cost for the use of renewable energy, which is larger than that for the use of

conventional energy sources, is expected to reduce in future with technological advancements and the


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extension of its use in society. When this condition has been met, a shift to the active use of renewable

energy and a reduction in the consumption of fossil fuel shall have to be realized, following the global

trend, with the aim of increasing the use of zero-emission power sources.


Figure 1-38 Best mix including expansion of renewable enegy

25%

35%

60%

25%

35%

5%

35%

15%

5%

10%

10%

5%

5%

30%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2041(P3/RE20)

2041 (P3)

2015

Gas Coal PI/RE Nuc Oil/Hydro/Others


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1.6.9 Hydropower development

(1) Current status and issues

1) Current Situation of hydropower development

Bangladesh’s climate is categorized as a subtropical zone monsoonal climate, and its characteristic is

abundant rainfall. As for the topography of Bangladesh, most of the national land is spread over the

delta area along the Bay of Bengal on the Indian subcontinent. Most areas are lower than 9 m above

sea level. In this regard, Bangladesh has relatively limited hydropower potential even though it has

abundant water resources. Only in the Chittagong hilly terrain area are there some potential

hydropower resources.

The existing Karnafuli Hydropower Plant is in the Chittagong area and uses the water of Kaptai Lake.

It is the only hydropower plant in Bangladesh and its total installed capacity is 230 MW. Its No. 1 and

2 units (2 units of 40 MW) and No. 3 unit (50MW) were installed with assistance from the United

States, and operation started in 1962 and 1982 respectively. No. 4 and 5 units were installed with

assistance from Japan, and operation started in 1987. Further, No. 6 and 7 units were planned as a

Japanese Yen Loan Project in order to strengthen the power supply for peak demand. However, since

an Environmental Impact Assessment was not carried out and local consensus was not attained, a

Japanese ODA loan was not provided for the project. The problem was caused by conflicts between

indigenous people and immigrant Bengali people who were living around Kaptai Lake. Compensation

issues during the construction of Kaptai Dam were also one of the causes. Even now, entry to the area

is restricted because of law-and-order problems.

Despite such a situation, the Government of Bangladesh expects further hydropower development for

reduction of CO2 emissions and power system stability.

2) Results and issues

Under this Study, potential hydropower sites for Pumped Storage Power Plants (PSPP) and Ordinary

Hydropower Plants (Ordinary HP) or Small Scale Hydropower Plants (SSHP) were surveyed. The

results of the survey and identified issues are shown as follows:

(a) Potential PSPP Sites

The potential PSPP sites identified in the preliminary map study are shown in Figure 1-39.

Comparison of the potential sites was conducted based on the results of the literature survey and site

reconnaissance. PSPP No. 17 was selected as the most preferable potential site for the first PSPP

project in Bangladesh, and PSPP No. 13 was evaluated as the second potential site. However, it is

judged that realization of the projects will be difficult at this stage because of limited map data,

restrictions on survey activities and difficulties in the acquisition of and compensation for land due to

local sentiments against hydropower development.

In the future, however, it is expected that the selected potential PSPP sites will be developed when the

need for PSPP development increases for stability of the power system, and the above mentioned

limitations regarding the project implementation are solved.


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Figure 1-39 Location Map of Potential PSPP Sites

(b) Ordinary HP/SSHP Potential Sites

The locations of the potential sites for ordinary HP and SSHP in this study are shown in Figure 1-40.

Although the number of site visits was limited the JICA Survey Team came to the assumption that

most of the potential sites along the Sangu main river may cause large scale resettlements due to the

relatively gentle slope of the river. Though there are some prospective sites in terms of technical and

economic viability, those sites may not be suitable sites for development in consideration of the

environmental and social impact aspects.

On the other hand, the potential sites on the tributaries of the Sangu River are anticipated to have

limited water flow, particularly in the dry season. Thus, those sites do not seem financially viable.

In this regard, these potential sites seem unattractive for development of hydropower projects.


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Figure 1-40 Location Map of Potential Sites for Ordinary and Small Scale Hydropower


Targets to be achieved for realization of hydropower development in the Chittagong hilly area are as

follows:

Topographic maps are required for the initial survey and planning for the development of

infrastructure including hydropower generation facilities. However, the topographic maps of the

Chittagong Hill Tracts that can be used in such a survey and planning are not available.

The government should develop and arrange more detailed (1/25,000 scale) maps required for

further planning and conceptual design.

The implementing agency needs to find a solution to ease the sentiments of local people and to

gain understanding as to the necessity of hydropower plants.

The government should reduce concerns over security in the area.

(3) Roadmap

The road map for development of a PSPP by 2030 is as follows:

Preparation of maps by 2018.

The topographic maps of the Chittagong Hill Tracts shall have to be made available by 2018.

Completion of FS and establishment and capacity building of organizations engaged in the

pumped-storage power generation (PSPG).by 2020.

It is necessary to conduct a pre-FS or FS for the construction of a pumped-storage power plant

(PSPP) at the candidate sites identified in this survey when the topographic maps of the areas

concerned have been created and the residents in the areas have given consent to the

construction.

Human resource development will also be required for the development of PSPG. An

organization engaged in PSPG shall have to acquire the basic knowledge on the functions, roles

and economic characteristics of a PSPP. Persons who are to make decision on the feasibility of a

project for the construction of a PSPP, in particular, must have sufficient knowledge of PSPG.


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Therefore, training on PSPG shall have to be provided to not only the staff of an implementing

organization responsible for PSPG but also the decision makers while the above-mentioned

pre-FS or FS is being conducted.

Completion of Detailed Design by 2023.

The training of the power system operators shall also have to be conducted. Stabilization of the

power system is a significant function of PSPPs. Therefore, the training of the system operators

will be required for the effective use of PSPPs.

It is also necessary to establish ancillary services in the electric power market. When the

proportions of coal and renewable energy as the sources of power generation in the power

system in Bangladesh increase, the necessity for not only the power load-leveling but also

ancillary services will increase and the significance of PSPG will increase. The improvement of

the power market including ancillary services will be required for the realization of the optimum

power source balance with proper evaluation of PSPG.

Commencement of Construction of a PSPP by 2024.

A PSPP is a facility contributing to the stabilization of a power system. However, it is not easy

to evaluate its value accurately. It is difficult for a private company to construct a PSPP because

the profitability of operating such a plant is low unless there exists a special market such as an

ancillary service market or a special rate system for PSPG. As the PSPP concerned is the first

PSPP to be constructed in Bangladesh, it is expected to be constructed by a parastatal company.

Therefore, it is recommended that the PSPP be constructed in accordance with the conclusion of

a F/S in an ODA project.

Commissioning of the first unit of a PSPP by 2030.


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1.6.10 Renewable Energy


Regardless of the economic status, developing or developed, it is the international trend to promote

renewable energy, as part of energy security as well as greenhouse gas emission reduction. Many

countries have adopted renewable energy promotion policies, such as feed-in-tariffs (FIT) and various

incentives. India in particular has an aggressive plan, where renewable energy shares half of the new

generation capacity to be built by 2040 (while India will also increase coal-fired power plants).

Bangladesh is not an exception to this trend. Its Vision2021 and COP-INDC promise that

Bangladesh’s renewable generation capacity share will become 5% by 2015 and 10% by 2021.

Bangladesh is currently preparing the competitive bidding by IPPs, drafting FIT and providing other

incentives (mainly financial ones) for renewable energy businesses. However, Bangladesh has major

constraints for renewable energy expansion – namely land availability and meteorological conditions –

and the maximum renewable energy (power generation) potential is up to 3,700MW (see the below

Table). Even if the Variable Renewable Energy (VRE), such as solar PV or wind potential, is

developed to the maximum potential and connected to the grid, Bangladesh will gain about 4,200GWh

per year. This amount is quite limited in comparison with the total grid generation energy (estimated at

82,000GWh in 2020, 307,000GWh in 2040), and the IEA points out that the 5-10% of VRE in the

network does not require a major transformation of network development or operation, as such output

variation can occur as a result of load change or unplanned power plant outage.1 Still, as far as

Bangladesh increases the grid-connected renewable generation capacity, network and operation

capacity needs to be improved. In addition, Bangladesh needs to develop technical rules and

regulations for grid-connected renewable energy generation, as they do not exist at this moment.

Table 1-10 Renewable Energy Potential in Bangladesh

Technology Resource Capacity

(MW)

Annual Generation

(GWh)

Solar Park Solar 1400* 2,000

Solar Rooftop Solar 635 860

Solar Home Systems, (SHS) Solar 100 115

Solar Irrigation Solar 545 735

Wind Park Wind 637** 1250

Biomass Generation Rice husk 275 1800

Biogas Generation Animal waste 10 40

Waste to Energy Municipal waste 1 6

Small hydro power plants Hydropower 60 200

Mini-grid, Micro-grid Hybrid 3*** 4

Total 3,666 7,010 * Case 1 (agricultural land excluded) estimate

** Case 1 (flood-prone land excluded) estimate

*** Based on planned projects only, not a theoretical maximum potential, because there is potential

overlap with off-grid solar systems. Either could be used to serve off-grid demand.

Source: SREDA-World Bank Scaling Up Renewable Energy in Low Income Countries (SREP)

Investment Plan for Bangladesh, October 2015

Biogas in Bangladesh, while it has limited potential as a power generation source or for meeting major

gas demand, has great potential as home cooking fuel. Considering LPG’s expensive price, biogas

1 According to the IEA, these variable renewable energies would not create a major technical problem if the share of the

generated renewable energy (GWh) is 5~10% of the total grid generated energy.


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could play an important role especially in rural areas in order to realize SDG 7’s “affordable and clean

energy” goal. However, some lead time is required for substantial roll-out of a new type (glass fiber)

of biogas digester by removing duties and developing domestic manufacturers, and addressing the

biogas issue is a mid-term target.

In addition to the “within-the-boundary” renewable energy potential, Bangladesh is in a good position

to exploit the ample regional hydropower potential and import it through the cross-border transmission

network. Another JICA Survey shows the cross-border hydropower potential available to Bangladesh

is 3,500-8,500MW in 2030, mainly from Nepal and north-west India. Details of the cross border status,

issues and countermeasures are discussed in 1.6.11 .


1) Domestic renewable energy power generation (cumulative): 2,470MW (by 2021), and 3,864MW

(by 2041)

2) Domestic biogas production: 790,000m3/day (including additional 600,000m3/day by 2031, 3

million m3/day by 2041)

3) Cross-border Energy Imports: 3,500~8,500MW (by 2031), 9,000MW (by 2041)

4) Cross-border energy import rules and regulations’ set-up, associated with capacity building in this

area (mid to long term)

(3) Roadmap

1) Domestic renewable energy power generation (cumulative): 2,470MW (by 2021), and 3,864MW

(by 2041)

One project utility-scale solar park IPP project on competitive bidding basis, contracted and

operation start (short term)

Wind Resource Assessment completion (short term)

Grid connection technical rules and regulations for renewable energy generation (short term)

Grid connection approval process for utility-scale renewable energy generation (short term)

Grid enhancement planning and implementation for utility-scale renewable energy generation

(short term)

FIT and reverse auction setup (short term)

Network operation to manage renewable energy’s variable output (short term)

FIT revision and application to new projects (mid term)

Utility-scale solar project roll out (short to mid term)

2) Domestic biogas production: 790,000m3/day (including additional 600,000m3/day by 2031, 3

million m3/day by 2041)

Import duty/levy on glass-fiber biogas digester/material removal (short term)

Glass-fiber biogas digester domestic manufacturer development (mid term)

Glass-fiber biogas digester roll-out through IDCOL loan scheme (mid to long term)

3) Cross-border Energy Imports: 3,500~8,500 MW (by 2031), 9,000MW (by 2041)

See 1.6.11

4) Cross-border energy import rules and regulations’ set-up, associated with capacity building in this

area (mid to long term)

See 1.6.11 .


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1.6.11 Power Imports


Industrial diversification and advancement are essential in order to achieve further economic

development in Bangladesh. To this end, improvement of the quality of the power supply, such as

stabilization of network voltage and frequency, is a prerequisite. In addition, in anticipation of the

growing share of coal-fired thermal power generation in the medium and long term, the exploitation of

renewable energy resources with low environmental burden under the climate change perspective is

envisaged.

On-grid large-scale hydropower development seems to be an effective measure to overcome the

aforementioned issues. However, due to its flat geographical features, Bangladesh lacks prospective

hydropower potential over 1 MW apart from the existing Kaptai hydro power plant (230MW). In

contrast, there is abundant water power resource potential in the countries surrounding Bangladesh,

namely Bhutan, Nepal, Myanmar, and the Indian States of the North East and West Bengal

(collectively “neighboring countries”). Thus, it is expected that Bangladesh imports electricity out of

such hydropower generation via power interconnections with such neighboring countries for stable

base load supply, energy fuel diversification, and climate change mitigation.

The challenges arising from importing power and their countermeasures are as follows.

(i) Energy Security

In the case of importing power from other countries, the risk of supply interruption caused by adverse

relationships between the two countries needs to be considered. Electric power, which is different from

other types of supply, is technically easy to shut down even in minutes. So it is necessary to avoid

excessive reliance on other countries in order not to place oneself in a serious situation. Specifically,

the capacity of imported power from one country should be within the limit of generating reserve

margin and also 10% of all supply capacity in order to continue the supply in the event of supply

interruption. In the case of Bangladesh, imported power from Bhutan and Nepal has to be transmitted

through India. Therefore, imported power from Bhutan and Nepal should be within 10% of all supply

capacity.

(ii) Compliance with Commissioning Timing of the Transmission Lines in India

The power import plan through India hinges on commercial operation of the Case 2 HVDC (±800kV)

interconnection line or the Case 3 HVAC (765kV) interconnection line. These interconnection lines

shall be constructed in close cooperation with India after fully understanding and confirming India’s

needs.

When hydropower capacity exceeds 3,000MW in Arunachal Pradesh, the ±800kV inter-state

transmission line currently under construction reaches its full transmission capacity, giving rise to a

need for the construction of the Case 2 interconnection line. On the other hand, there seems to be no

reason for India to realize the need for the Case 3 line for the time being. However, need for the Case 3

line’s construction will arise if construction of the Case 2 line is delayed due to a delay in the hydro

power development in Arunachal state, or high construction costs etc.

(iii) Massive blackout due to large scale power loss of supply

It is desirable to import as much power as possible through one connecting point from the viewpoint

of economic efficiency. However, if a huge amount of power is transmitted through one connecting

point, it can lead to the risk of massive blackout, such as blackout across the entire country during the

shutdown of the connecting line. Massive blackout occurred on 1st November 2014, triggered by

500MW power loss of the BTB break down on the inter-connection line from India. In order to avoid


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this risk, the limit of the power loss level needs to be worked out, by checking sufficiently continuous

power generators’ operation during frequency drop and the load shedding scheme during large scale

power supply loss. Based on this result, the maximum level of import capacity in one inter-connection

point has to be decided. In concrete terms, it is preferable that the amount of imported power through

one connecting point is within 10% of the demand.

(iv) Mutual Interference due to Grid Accidents

Conducting power trading means transmission lines are connected between two neighboring countries,

which will lead to the threat of mutual interference due to grid accidents. But it is possible to minimize

the influence by connecting DC lines. Current inter-connection lines between India and Bangladesh

apply DC lines or non-connected lines by switching the load. There will be a few mutual interferences

due to grid accidents in these two cases.


(i) High Case Scenario

The High Case Scenario, in which more electric power can be expected due to operation of the Case 2

line and Case 3 line starting on schedule, is shown below.


Figure 1-41 Future Power Import Volume and its Share (High Case Scenario)

The share of power imports against the total supply capacity will be between 20% and 25% within the

permissible range, albeit a little bit large.

(ii) Low Case Scenario

The Low Case Scenario, in which excessive import of electric power from neighboring countries is not

expected, is shown below.


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Figure 1-42 Future Power Import Volume and its Share (Low Case Scenario)

The share of power imports against the total supply capacity will be approximately 15% within the

appropriate range after 2025.

(3) Road Map

Agreement acquisition with India is indispensable in order to achieve the plan for power imports from

the neighboring countries that are mentioned above. In particular, it is important to negotiate

tenaciously on the following items.

Advanced development of the Case 3 line

The Case 3 line is more flexible than the Case 2 line, and more effective for Bangladesh.

Because Bangladesh can import electric power from various regions by using the Case 3 line

it is important that it aims to advance development of this line.

Securing power transmission capacity in India

Bhutan and Nepal are positively in favor of electric power exports to Bangladesh. However,

when Bangladesh imports electric power from the two countries, it must pass through the

Indian system. It is especially important to match the system development plan in India and to

advance the plan if necessary in order to secure the power transmission capacity in India.

Direct connection of PSPP in Meghalaya state to Bangladesh system

The PSPP is a very effective tool for stabilizing the system and improving the power quality. It

is necessary to connect the generator directly to the Bangladesh system to enjoy such an effect.

As for the PSPP in Meghalaya state, large-scale development of 1,000MW or more is possible

at each site. Therefore, it is possible to secure economy even if the system is divided into two

parts at the power plant and half of the generators connect with the Bangladesh system

directly.

The existing communication channel suffices for discussions over bilateral power trades between

Bangladesh and India. However, if power trades with Bhutan and Nepal are involved, the use of the

Indian network is inevitable. Bilateral discussions between a seller (Bhutan or Nepal) and a buyer

(Bangladesh) are not enough to facilitate such power trades. A multilateral framework that includes

India is a prerequisite.

To provide a discussions platform of this kind, a group of countries comprising Bangladesh, Bhutan,

India and Nepal (BBIN) has been formulated. BBIN holds Joint Working Groups (JWGs) twice a year.

Therefore, it seems to be most effective to discuss regional power trades and interconnection in JWGs


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for the implementation of specific projects.

1.6.12 Nuclear Power


PSMP2016 aims to create a well-balanced power generation environment that maximizes the

respective advantages of different types of power generation methods, including nuclear power,

thermal power, hydropower generation, and power imports from neighboring countries, from the

comprehensive perspective of stable supply, or energy security, environmental performance, and

economic efficiency.

Daily power demand, or load curve varies according to season, temperature, and time of day. Since

electricity cannot be stored, and must be used as it is produced. Gas and oil based thermal power

generation, by virtue of its ability to respond quick flexibly to ever-changing power demand, supplies

middle and peak load. Nuclear power, power import, hydropower, and coal-based thermal power

generations are considered as a base load energy. This combination of different types of power sources

is commonly referred to as the best mix of power sources. In this PSMP2016, nuclear power

generation plays an important role in providing a stable base load.

The following figure shows the PSMP2016 scenario on nuclear power generation, following

discussions with the relevant institutions. It is assumed the first unit 1200MW is to start operations by

2024 and the second 1200MW by 2025 on PSMP2016. These figures are preconditioned in the power

development planning without alternative cases, which means nuclear power is assumed as one of the

Fixed Factors in terms of generation capacity in the simulation, considering the government’s nuclear

power projects planning.


Figure 1-43 Nuclear Power Development on PSMP2016


Realization of development of nuclear generation facilities, many challenges shall be solved.

(i) Meeting IAEA safety standards2

Nuclear safety remains the highest priority for the nuclear sector. Regulators have a major role to play

2 IAEA Safety Standards homepage


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to ensure that all operations are carried out with the highest levels of safety. Safety culture must be

promoted at all levels in the nuclear sector (operators and industry, including the supply chain, and

regulators) and especially in newcomer countries (Nuclear energy roadmap actions and milestones,

IEA, 2015) like Bangladesh. Followings are major frameworks to secure the nuclear safety to be

followed and utilize for Bangladsh.

Nuclear safety is a global issue. There are many instruments for achieving high level of nuclear safety

on a global basis, such as IAEA safety standards, safety review services provided by the IAEA. The

IAEA safety standards provide a system of safety fundamentals, Safety Requirements and Safety

Guides for ensuring safety. They reflect an international consensus on what constitutes a high level of

safety for protecting people and the environment from harmful effects of ionizing radiation. The IAEA

safety standards are applicable throughout the entire lifetime of facilities and activities existing and

new utilized for peaceful purposes, and to protective actions to reduce existing radiation risks. For

proceed nuclear power project, all shall follow the IAEA safety standards.

Source: IAEA Safety Standards homepage

Figure 1-44 Structure of IAEA Safety Standards

IAEA recommends some critical issue for strengthen nuclear safety

The regulatory body should be strengthened. The draft Bangladesh Atomic Energy Regulations

Act of 2011 should be promulgated as soon as possible to establish an independent regulatory

body.

Management of the nuclear infrastructure development should be strengthened. Bangladesh

should commit to ensure appointment of leaders (especially in future owner and regulatory body)

with appropriate training and experience for leadership and management of safety. Integrated

management systems (including quality management) should be planned and implemented in

both BAEC and the regulatory body that define the organizational goals and key processes in

sufficient detail.

(ii) Establishment of fuel cycle management3

Based upon the existing nature of the nuclear business worldwide, Bangladesh is considering a

long-term contract and transparent suppliers' arrangements with supplier(s) through backing of the

3 IAEA Country Nuclear Power Profiles, 2016 update


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respective government in order to ensure availability of fuel for the nuclear power reactor of the

country. Examples would be fuel leasing and fuel take-back offers, commercial offers to store and

dispose of spent fuel, as well as commercial fuel banks. On the other hand, at present there is no

international market for spent fuel disposal services except for the readiness of the Russian Federation

to receive Russian supplied fuel. Storage facilities for spent fuel are in operation and are being built in

several countries.

Bangladesh is considering accessing detailed technical descriptions of the nuclear fuel assemblies

offered from the supplier side, including physical, thermo-hydraulic, thermodynamic and mechanical

data as well as calculations for batch planning (short term and long term). The supplier shall provide

the QA programme, Handling and inspection methods for new and spent fuel and Tools for fuel and

control rod manipulation and the scope of supply and services. The first core as well as the first reload

should be included in the scope of supply for the plant. The bidders should include the supply of

further reloads as an option.

IEAE points out that the general concerns of Bangladesh about the nuclear fuel cycle are as follows.

The owner/operator of the nuclear plant in Bangladesh needs to ensure availability of fuel for the

NPP from supplier(s) covering its entire life cycle.

The above life cycle supply assurance shall include all services related to the front end of the fuel

cycle. “Fuel leasing-fuel take-back” model (full or partial) is conceivable for Bangladesh.

Alternate sources of services and supply of the front end of fuel cycle should be identified to

accommodate any unforeseen circumstances.

Depending on the size of the nuclear power programme, efforts will be made to acquire the

technology of fabrication of fuel elements based on imported raw materials and enrichment

services in order to ensure security of fuel supply.

Pending a final decision on the back-end of the fuel cycle, the NPPs will have provision for on/

off -site spent fuel storage, the size of which shall be sufficient to store the spent fuel generated

over their respective life cycles.

Sufficient security and physical protection and safety of the fuel storage on-site will be provided

in accordance with the relevant provisions of the non-proliferation regime, as well as national law

and regulations on nuclear safety and radiation control.

Bangladesh will consider any suitable model of nuclear fuel cycle under the responsibility of the IAEA

as the guarantor of service and supplies, e.g. as administrator of a fuel bank.

Bangladesh opines that as far as assurances of supply are concerned, the proposed multilateral

approaches to nuclear fuel cycle could provide the benefits of cost-effectiveness for developing

countries with limited resources. Bangladesh is strongly supporting the Agency’s approach of

developing and implementing international supply guarantees with IAEA participation.

(iii) Proper knowledge about nuclear safety and Public Acceptance

Many kinds of programmes, such as meetings and seminaars with journalists, local people, have been

arranged till now, and Bangladesh has established Nuclear Industry Information Center in 2013. 4

These kind of activities should be continued and enhanced for the public knowledge which will be the

basis for public acceptance.

However, BAEC has conducted survey in 2015 on public acceptance / awareness for nuclear power

project and it is found that still concrete public opinion for nuclear power generation has not yet

formed in Bangladesh since accurate information of nuclear generation technology has not became

widely and correctly known.

Therefore, the government has to do more supporting enlightenment activities to enhance accurate

technical knowledge on nuclear generation with good point and bad point as well as safety issue.

4 Presentation by MoST, “NATIONAL NUCLEAR POWER PROGRAMME OF BANGLADESH”,

https://www.iaea.org/NuclearPower/Downloadable/Meetings/2014/2015-02-03-02-06/D1_S2_Bangladesh_Akbar.pdf


Final Report

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It is also recommended to review other countries’ experience of interactive communication with

public (citizen society) on nuclear technology and its safety, and ask for necessary cooperations.

As for emergency preparedness, several committees have been formed involving relevant stakeholders

to formulate the emergency management system during the operation of Nuclear Power Plant in the

territory of Bangladesh. These committees have already held several meeting with national and

international experts. The Government is also very much eager to develop a standard emergency

preparedness system for the densely populated country.

Source: Ministry of Science and Technology, 2015

Figure 1-45 Nuclear Industry Information Center

In addition, the government is preparing the Multi purpose information center around Rooppur NPP

site to strengthen public communication strategy with public and media. Expected PR-program is as

follows;

Scientific workshops & round tables, discussion clubs

Information center

Social networks/ Social activities

Expert opinions

Televisions (talks shows, documentaries)

Book “100” Facts bout Nuclear Energy

Communication of press releases & organization of interviews

Interaction with neighboring countries…etc

(iv) Participating international framework5

The Asian Nuclear Safety Network (ANSN) was launched in 2002 to pool, analyze and share nuclear

safety information, existing and new knowledge and practical experience among the countries.

Moreover, the ANSN is expected to be a platform for facilitating sustainable regional cooperation and

for creating human networks and cyber communities among the specialists of those countries.

Development of a regional capacity building system composed of knowledge network, regional

cooperation and human networks will serve for enhancement of nuclear safety infrastructures in the

participating countries, and will serve eventually for ensuring and raising the safety levels of nuclear

installations in the region. The ANSN has recently expanded to become a forum for broader safety

strategy among countries in the region.

The current participating countries are Bangladesh, China, Indonesia, Japan, Kazakhstan, Republic of

Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Australia, France, Germany and

the USA are ANSN supporting countries. Pakistan is an associate country in activities related to the

5 Asian Nuclear Safety Network homegage


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safety of nuclear power plants and/or strengthening their regulatory frameworks.

For proceed nuclear power project, all shall work with international framework.

Source: Japan Nuclear Energy Safety Organization

Figure 1-46 Asian Nuclear Safety Network (ANSN)

(v) Ratification to the international laws and standards

Bangladesh has not ratified the following critical international laws:

Vienna Convention on Civil Liability for Nuclear Damage

Protocol to Amend the Vienna Convention on Civil Liability for Nuclear Damage

Joint Protocol Relating to the Application of the Vienna Convention and the Paris Convention

Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste

Management, etc.6

For the implementation of RNPP, these international laws and standards should be followerd.

(vi) Other issues

There are many issues such as;

Nuclear power planning integrated into the part of power & energy planning, such as alternative

generation capacity in case of outage of nuclear power plant, reliability of the power supply

system

Development of science technology experience within the country

Emergency planning

Protection of the power plant from natural disaster (e.g. cyclone, flood, earthquake, etc) or outside

human disaster (e.g. terrorist activities, etc)

(3) Road Map

(i) Construction

Consideration of the domestic legal and regulatory conditions to obtain;

required licenses for building NPP,

industrial base to support NPP construction,

availability and competence of human resources for managing the NPP construction project,

national resources as well as its social, economic and environmental condition to support NPP

build.

6 IAEA factsheet: https://ola.iaea.org/ola/FactSheets/CountryDetails.asp?country=BD


Final Report

1-71

Source: Ministry of Science and Technology, 2015

Figure 1-47 Roadmap for nuclear power development

(ii) Legal and implementation framework

All legal and implementation framework shall be established, and even be in an active before a

commissioning of the first nucleare power generation as follows;

Meeting IAEA safety standards

Establishment of fuel cycle management

Propoer knowledge about nuclear safety and public acceptance

Participating international framework

Ratification of the international law and standards

(iii) Comissioning of generation

2024/25: 1st and 2

nd units

2030/31 3rd

and 4th units

2040/41 5th and 6

th units


Final Report

1-72

1.6.13 Power System Plan


1) Transmission Plan

The operating voltages of the Bangladesh power network system are below 230kV and 132kV, except

for the 500MW HVDC link to India that began to be operated in 2014 at Bheramara. The 400kV

transmission lines and substations have just recently started to be constructed. Many existing power

stations have only a capacity of below 100MW, using domestic gas. They are currently distributed

across the whole of the nation. The following figure shows the current national power network system

of Bangladesh, which consists of 230kV and 132kV, without 400kV, and small-scale power stations

connected to substations distributed across the whole of the nation.

Figure 1-48 The Existing Bulk Power Network System of Bangladesh (2014)

An efficient power network system, including 765kV and 400kV transmission lines, needs to be

studied in consideration with the plan for large scale power stations, the high density of power demand

in and around Dhaka and Chittagong and the characteristics of Bangladesh’s power network system as

shown below.

The rapidly deteriorating and inefficient small-scale power stations with capacity below around

100MW will be phased out in sequence.

The future thermal power units will mainly use imported fuel such as coal or LNG. Because the

locations where suitable seaports can be constructed to receive large scale ships for imported fuel

are limited to south Chittagong and Khulna (Pyra and Patuakhali), the large scale power stations

with a capacity of several thousand MW will be unevenly distributed in those areas.

A nuclear power station with a total capacity of 4,800MW is planned for Rooppur.

In the case of power transmission from hydropower stations located in Bhutan or Nepal through


Final Report

1-73

India, HVDC interconnections with a capacity of around 500–2,000MW will be required in the

north western part of Bangladesh.

The power demand density in Dhaka and Chittagong will increase further due to their rapid

growth ratios.

Although it is required to transmit power of several thousand MW from Chittagong to Dhaka, the

number of circuits in the transmission lines is restricted on the route through Comilla because the

width of the country is narrow and the population density is large in the Comilla region.

The construction of transmission lines crossing between east and west in Bangladesh will incur

much cost because Bangladesh has two large rivers, named Jamuna and Padma, flowing in the

center of the country, with widths of at least around 4.5km to 6km.

2) Rural Electrification

While the government has established “Electricity for all” by 20217, in its Vision Statement, there is

no single internationally-established definition for electricity access.

As of December 2015, the Power Division recognizes the electrification rate of Bangladesh as 77%. In

government policy statements such as the 7th Five Year Plan, the Power Division’s figure is adopted.

Table 1-11 Electrification Rate Calculation Details by Power Division

Source: Power Cell, Power Division

The Electrification rate adopted by BPDB is the ratio of number of access and the whole population.

Access to Electricity is calculated by the below equation.

Source: BPDB System Planning Division

*1 It assumes that the number of people per grid connection (per household) is 7.

Household: Husband, wife, children x 2, father, mother + 1. There are big customers

such as hospitals, so 1 is added.

*2 It assumes that the number of people per off-grid connection (renewable) is 4 (-2014) or

5 (2013-). This is based on the assumption that a household using SHS has fewer family

members than a grid-connected household.

This BPDB definition indicates that the electrification rate improvement has two paths: one is on-grid

connection, the other is off-grid connection (e.g. SHS).

7 In the 7th Five Year Plan adopted in December 2015, the target by 2020 is set as “electricity coverage to be increased to 96

percent with uninterrupted supply to industries”.

BPDB REB DPDC DESCO WZPDCL SHS

No. of Domestic (Residential)

customer2,721,205 12,223,002 910,336 641,978 728,453 4,000,000

Family member parameter 5.5 6.5 4.5 4.5 5.5 4.0

No. of people with electricity

access14,966,628 79,449,513 4,096,512 2,888,901 4,006,492 16,000,000

Total No. of population with

electricity access

Total population of Bangladesh

Access to Electricity

157.8 million

77%

121,408,045

PopulationTotal

SHSofNumberCustomerdElectrifieofNumberyElectricittoAccess

2*1* 47%


Final Report

1-74

The following figure shows the Access to Electricity provided by BPDB. According to this figure,

60% of the population was electrified by grid connection; 8% was electrified by SHS installation. In

total, 68% of Bangladesh was electrified in 2014.

Source: JICA Survey Team, based on the data provided by BPDB

Figure 1-49 Development of Access to Electricity (BPDB definition)

The below Figure shows the BREB’s grid extension projections by 2021, compared with the actual

trend in the past up to 2015. The solid black line shows the actual implementation, and the red solid

line indicates the sum of the individual grid extension projects (as of February 2016).

It should be noted that BREB made a great improvement in grid extension implementation between

2014 and 2015, when it substantially increased the grid extension speed compared with the past

(between 2003 and 2013). The dotted blue line (Projection 1 in the Figure) means that if BREB keeps

the implementation speed as fast as that between 2014 and 2015, it will in theory reach 100% on-grid

extension (in other words, 440,000km distribution line development) by 2021 (it should also be noted,

however, that there is a technical issue with on-grid extension, as described later). On the other hand,

if BREB lowers its grid extension implementation speed to as slow as that between 2003 and 2013, it

would end up far below its target (green dotted line, projection 2 in the Figure).

30% 32% 35% 38%42% 43% 44% 47% 48% 49%

53% 55%60%0%

0%0%

0%0% 0% 0%

0%2% 3%

7%7%

8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Ele

ctif

ied

rate

(%)

Electlified Rate by On-Grid Electlified Rate by Off-Grid


Final Report

1-75


Figure 1-50 BREB On-grid Extension Plan Comparison

The SHS installment has been implemented by IDCOL and the progress is at a world-renowned pace

(as seen in the below figure).


Figure 1-51 Number of SHS under IDCOL Program

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Actual Plan Projection 1 Projection 2


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(2) Target of the study


The power network system is examined by categorizing the study phase into mid-term (2025) and

long-term (2035) through reviews of PSMP2010 in consideration of the application of 400kV and

765kV. The transmission lines and substations are planned in order to fulfill the criteria that are set as

the rules for power network system planning and analysis.

An efficient bulk power transmission network is planned reflecting the results of the power demand

forecast and power generation plan in this MP by recognizing the abovementioned current situation

and issues.


Figure 1-52 Conceptual Map of Locations of Large Scale Power Stations Planned Up to 2035


Only one definition of electrification rate should be selected. Also, the national census states that

the average family member size is 4.6, while 7 is adopted by BPDB.

Grid extension in the next 5 years requires the same implementation speed as that seen between

2014 and 2015, or twice as fast as the historical pace (average between 2003 and 2015).

BREB and IDCOL coordination and communication should be improved for efficient planning and

implementation. BPDB’s current role as “coordinator” could be reconsidered.

SHS waste recycling needs will drastically increase after the early 2020s. It should be confirmed

whether the current scheme has proven effective and scalable.

Khulna

Import

fuel

Matabari,

Mohesikali

Import fuel

India PSPP

Dhaka

6 GW

8 GW

3.5 GW

1 GW

1 GW

Barapukuria, Jmrpur Interconnection

Bheramara Interconnection

1 GW

Comilla North Interconnection

5 GW Nuclear

Other Gas (distributed) 6.0 GW


Final Report

1-77

1.6.14 Improvement of Power Quality


1) Necessity of Power Frequency Quality Improvement

In general, the following objectives to improve frequency quality can be mentioned:

To improve the quality of industrial products.

To increase the allowable capacity of PV and wind power sources.

To secure the stable operation of large capacity generation plants (especially, nuclear power

plants).

All of the objectives may have high potential needs, but the methodology for determining the target

value for improvement has not been established yet. And it becomes more difficult than before to

determine the target value because the number of inverter circuits, which are inserted between the

power grid and consumer’s facilities or distributed power sources, is gradually increasing, though,

qualitatively, it can be determined depending on the trade-off relationship between cost and benefit for

consumers.

On the other hand, for stable operation of synchronous machines, such as large capacity generating

units, there is a quantitative requirement that the frequency quality shall be raised to within ±1.0% of

the standard value (50±0.5Hz).

In particular, the equivalent frequency quality is required in order to connect and operate stably the

nuclear power plant planned to be commissioned in 2024. Therefore, ±1.0% can be set as a

short-term target value.

Consequently, we set, in this Study, “±0.5Hz by 2024” as an essential target value, and “±0.2Hz by

2041 at latest” as a tentative value.

2) Current Situation

(a) Current conditions of generating facilities and significant deficiency of power sources

As seen in the results of the survey about the situation of supply-demand balance on days of maximum

peak demand from 2013 to 2015, the load shedding operation is frequently performed, even though the

installed capacity rate has been adequately secured at more than 130% every year.

The major factors involved in this situation are as follows:

The available capacity is chronically insufficient due to decreases in the output and thermal

efficiency and failures of power generators mainly due to the insufficient periodic maintenance,

which results in a decrease of around 30% of installed capacity.

Normally, full authority for preparing, approving and implementing the supply-demand balance

plan should be given to NLDC in order to carry out the balancing operation properly. However,

NLDC has no authority to coordinate the generating plans prepared by BPDB and other

generation companies.

(b) The actual conditions of power frequency control

At present, adjustment of the output of generators is instructed by phone (online instructions from

SCADA are not issued). System frequency deviation from 50 Hz often exceeds ±1.0 Hz even in the

normal operating condition (Grid Code stipulates that the system frequency shall be controlled within


Final Report

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50Hz±1.0Hz under normal conditions.)

The major factors contributing to this situation are as follows:

There is almost no remaining power which can be offered for frequency control due to a

significant deficiency in power sources. That is, all generators have no other choice except to

keep their outputs at the maximum of available capacity.

Grid Code in Bangladesh seems to have most of the necessary and minimum provisions related to

frequency regulation and authority of NLDC. However, unfortunately, these provisions still seem

to have poor effectiveness.

There is no compensation system for the opportunity loss of power selling due to the contribution

to frequency control. There is a strong desire to obtain detailed information about a power system among the

stakeholders, because supply-demand control and frequency regulation should be performed

under fair and transparent circumstances.

3) Issues regarding power quality

(a) Regulatory framework

Regulation by the Electricity Acts

A rough comparative study between the provisions of Electricity Acts in Japan and Bangladesh is

performed.

As shown in the following table, there is only one obligatory provision (④) without penalty in relation

to stable demand/supply operation and frequency control in Bangladesh, while there are five

provisions with penalties in Japan:

Amendment is urgently required regarding several kinds of obligation rules and their penal provisions

in order to enhance effectiveness.

Provisions

Article Penalty Article Penalty

① Obligation to supply 18 Yes None -

② Obligation of endeavor to maintain

voltage/frequency value 26 Yes None -

③ Obligation to prepare a “Supply Plan” 29 Yes None -

④ Obligation to prepare “General Supply

Provisions” 19, 19-2 20, 21 Yes 22 None

⑤ Restrictions on Use of Electricity 27 Yes None -

Regulation by independent regulatory organization

The JICA survey team performed a comparative study of provisions between the two Grid Codes

established by the regulatory commission of each country, BERC (Bangladesh) and OCCTO (Japan),

in relation to the work process for supply-demand operation and frequency control, as shown in the

following table:

From the results of this comparative study, it was found that the necessary minimum provisions for the

supply-demand control process are appropriately stipulated in BERC’s Grid Code. However, there

seem to be no provisions for securing reserves (operating reserves, spinning reserves and so on).


Final Report

1-79

Provisions Details

Supply Plans (Power Plants and Network Development Plan) Yes None

Demand Forecasting

Variety of Forecasting Yes Yes

Responsibility of Forecasting Yes Yes

Post Facto Inspection Yes None

Planned outage schedule

Integration for the Draft Plans Yes Yes

Coordination between Users and Finalization of the Plans Yes Yes

Particular Points to note Yes Yes

Demand/Supply Balance

Schedules

Preparation of the plan and Monitoring the balance Yes Yes

Operating Reserves Yes None

Spinning Reserves Yes None

Margin for lowering Yes None

Measures when supply demand balance worsens Yes Yes

Real-time System

Operation

Frequency Control Yes Yes

Power Quality Analysis Yes None

Information Publication Yes None

(b) Prospect of frequency quality improvement and challenges in the future

Frequency regulation control is usually realized by a combination of FGMO (Free-governor mode

operation) and LFC (Load frequency control).

In this study, the JICA survey team conducted a trial calculation for future frequency improvement

when the regulation control is performed by FGMO only, because:

LFC function in SCADA/EMS is not prepared for use at present.

LFC cannot follow the sudden change in supply-demand balance caused by the trip of a

generating unit or load shedding.

Power frequency quality improvement in the N-0 Case (Normal Conditions)

Unfortunately, there is no globally standardized method to evaluate the frequency improvement.

Therefore, in this study, the JICA survey team calculates the available spinning reserves provided by

generators and the necessary amount of reserves to improve the frequency fluctuation per 0.1Hz, under

certain conditions and assumptions. The trend of future frequency quality can be estimated by finding

the balance point of available reserves and necessary reserves. For details, refer to the full final report.

The following graph shows the available spinning reserves and necessary amount of reserves each

year:


Final Report

1-80


Figure 1-53 Comparison between the Necessary Reserves and the Available Reserves

Solid line in red + Range in green = Available spinning reserves

= [Hydro (100%) + Oil (100%) + Gas (100%) + Coal (50%)] newly installed after June 2015

× 80% (assumption of planned and unplanned outage rate)

× 3 - 7% (assumption of the effective range of adjustment by FGMO)

Dashed lines : ΔP = 0.263 *√P (MW/0.1Hz)

ΔP : Necessary amount of reserves to improve frequency per 0.1Hz

P : Total power demand

(Frequency fluctuation, at present, is assumed to be ±1.5Hz)

The following graph shows the trend of frequency quality improvement from the viewpoint of

fluctuation range. Fluctuation range under normal conditions, at present, is set to ±1.5Hz according

to the chart provided by NLDC.

0

500

1000

1500

2000

2500

20

15

20

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20

39

20

40

20

41

Pri

mar

y re

serv

e[M

W]

Necessary Primary Reserves (N-0)

Available FGMO rate 5%

±1.4Hz

±1.2Hz

±1.0Hz

±0.8Hz

±0.6Hz

±0.4Hz

±0.2Hz

Necessary primary reserves

to improve within ±0.2Hz

Necessary primary reserves

to improve within ±0.5Hz

Range of FGMO Regulation (3 - 7%)

Commissioning

Rooppur Nuclear P/S


Final Report

1-81


Figure 1-54 Trend of Power Frequency Quality Improvement

From the results of these analyses, there will be huge potential for appropriate frequency regulation

under normal conditions, if sufficient reserves for FGMO can be prepared in a carefully planned way.

By 2024, when a Rooppur nuclear power generating unit commences to be operated, sufficient

reserves can be prepared so that the frequency fluctuation can be reduced to ±0.5Hz or so, if

effectiveness of FGMO is expected to be 5% of total demand (average level)

By 2041, sufficient reserves can be prepared so that the frequency fluctuation can be improved to

±0.2Hz or lower.

Power frequency quality improvement in the N-1 Case (Emergency Conditions)

Even when a significant frequency deviation occurs due to a sudden trip of large capacity generators,

lowering of frequency should be limited to within a certain level and promptly recovered via sufficient

reserves.

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

20

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41

Available FGMO rete 5%

without FGMO

Freq

uen

cy F

luct

uat

ion

: ff

[ 5

0±

ff H

z] Range of FGMO Regulation (3 - 7%)

Commissioning

Rooppur Nuclear P/S


Final Report

1-82


Figure 1-55 Schematic Diagram of the Frequency Deviation Immediately after the Generation

Trip

Overshoot of frequency immediately after the generation trip can be regulated only by FGMO and the

inherent characteristics of the flywheel effect in load. Therefore, urgent preparation for FGMO is

required in Bangladesh. The large capacity generator (power source) trip events which should be taken

into consideration in Bangladesh are as follows:

Table 1-12 Supply Trip Amount and Factors Which Should Be Considered in Each Year

Year Supply trip amounts Factors

2015~2024 500MW Single apparatus fault of HVDC 500MW

2024~2041 1180MW Single unit trip of Rooppur nuclear power plant Source: JICA Survey Team

The following graph shows the assumption for frequency deviation (Δf) using the standard value in

TEPCO, when a sudden trip of a Rooppur nuclear power unit (1180MW) occurs under the minimum

demand conditions each year after 2024.


Figure 1-56 Trend of minimum values of frequency immediately after a sudden trip of a

Rooppur unit

Amount of generator trip is small (Total demand is

Large) and the frequency is restored to 50［Hz］

Amount of generator trip is large (Total demand is small)

and the frequency transiently overshoots.

Bottom of frequency


Final Report

1-83

As shown in the graph above, frequency overshoots below the UFR settings, 48.9Hz, due to the trip of

the Rooppur unit in a low demand season or time zone, which leads to load shedding until 2028.

However, it should be allowed in order to avoid a cascading outage and blackout.


1) Improvement of Electricity Act and Grid Code Framework

(a) The Electricity Act 1910

Amendment to add provisions for various obligations and penalties for improvement of power quality

is urgently required.

(b) The Grid Code 2012

Grid Code in Bangladesh has necessary provisions to a certain extent, but provisions in relation to

preparation of reserves should be enhanced.

2) Improvement of Frequency Quality

Adequate reserves for FGMO should be prepared in a planned way, enough to improve frequency

fluctuation within ± 0.5 [Hz] (1/3 of fluctuation at present) as recommended in IAEA guidelines until

the operation of Rooppur nuclear power plants start in 2024 and 2025.

Adequate reserves for load shedding by UFR should be set in order to prevent a blackout as a tentative

measure.

(3) Roadmap

Key issues

in

PSMP2016

The goal Action Plan Target Prio

rity Short-term

(2016~2021) Medium-term

(2022~2031) Long-term

(2032~2041)

Power

Frequency

Quality

Improvement of

Electricity Act and

Grid Code

Framework

(Provisions for

obligation and

penalty）

Amendment of Electricity Act

Amendment of Grid Code

Improvement of NLDC Operation

Procedures

H

H

H

Improvement of

Frequency Quality

FGMO by newly installed units

- Planning and Designing

- Manufacturing/Conversion

- Testing and simultaneous

commissioning of units

planned from 2015 to 2021

- Promote systematically

according to the installation

plan after 2022

LFC by newly installed units

H

H

H

H

M

Preparation of reserves for load

shedding by UFR

M


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1.6.15 O&M Legal Framework


It has not been possible to suspend the operation of power generation facilities and inspect them regularly

because of the permanent shortage of the power supply in Bangladesh. The legal framework for the

preventive maintenance and O&M of these facilities is insufficient. BPDB is financially unsound because

of the low power purchase price. Because of these reasons, the power generation facilities are not

operating at their design performance level (in terms of power output, thermal efficiency, etc.). Therefore,

the establishment of an integrated system for the stable power supply is required. The analysis conducted on solving the problems concerning the preventive maintenance and O&M of the

thermal power plants with the development of a system, or the establishment of a legal framework, is

described in this subsection. In addition, the analysis conducted on solving the same problems with

measures to be taken in the plants is described in the next subsection.

<Issues>

1) Necessity of institutionalization of periodic inspections

Since periodic inspection is not stipulated by law in Bangladesh, periodic inspections tend to be

postponed due to reasons such as budget shortages or tight electricity demand, thus resulting in

unplanned and undesirable shutdown.

2) Necessity of institutionalization of safety audits

Government agencies, as they do not visit power plants to check the inspection situation, do not know

whether the machine conditions allow proper operations or not.

3) Necessity of institutionalization of chief engineer

As the responsibility for technical matters in a power plant is not clear, the organization doesn’t

function properly in the case of trouble.

4) Necessity of institutionalization of Safety regulations

Basic concept of security for operations in power plant is not documented.

5) Necessity of institutionalization of technical standards

National technical standards that would reduce the amount of accidental trouble and disasters are not

regulated.

These five provisions are essential for stable operation in Bangladesh.


Periodic inspections

Purpose

To avoid postponement of inspections due to budget shortages or tight electricity demand, etc.

by securing periodic inspections.

To prevent serious accidents by conducting periodic inspections.

Action


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Authorities decide the intervals and inspection items for periodic inspections.

Generators have to conduct the periodic inspections.

Safety audits

Purpose

To audit whether periodic inspections are implemented properly or not.

If there is a defect in the periodic inspection, auditors instruct on its correction.

Action

Authorities decide items for safety audits

Generators undergo periodic safety audits by authorities

Chief engineer

Purpose

To clarify the responsibility for technical matters

To carry out technical management under the chief engineer

Action

Authorities order generators to stipulate the responsibility of chief engineer

Generators select chief engineer from among licensed persons

Safety regulations

Purpose

To establish self-management system by making safety regulations

To establish PDCA cycle of operation independently

Action

Authorities order generators to set up safety regulations

Generators follow their safety regulations

Technical standards

Purpose

To prevent accidents and disasters caused by technical issues

To reduce the amount of forced maintenance work

Action

Authorities make national technical standards

Generators follows the national technical standards

(3) Roadmap

The suggested O&M legal items mentioned above can be divided into three categories as mentioned

below, and these measures are recommended to be taken step by step.

Strengthening of control by government

Periodic inspections

Safety audits

Self-management by Generators

Chief engineer

Safety regulations

Enhancement of technical aspects


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Technical standards

Based on the assumption that the preparation time for regulations is 2 years and the starting time for

the respective categories has a 1 year difference, the schedule becomes as follows.

Figure 1-57 Schedule for Legal Reform

Implementation of the regulations



STAGE2

Self-

management by

Generators

STAGE3

Enhancement

of technical

aspects

Year6

STAGE1

Strengthening

of control by

government

Year1 Year2 Year3 Year4 Year5

Periodic inspection

Safety audit

Authorities decides the intervals and inspection items

Generators has to conduct the periodic inspection

Authorities decides items of safety audit

Generators undergo safety audit by authority periodically

Chief engineer

Safety regulations

Authorities order generators selects the chief engineers

Authorities order generators makes safety regulations

Generators selects chief engineer among licensed person

Generators follows the safety regulations

Technical standards

Authorities makes technical standards

Generators follows the technical standards

Preparation Action

Preparation Action

Preparation Action


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1.6.16 Thermal Power Plant O&M


In Bangladesh, some thermal power stations have a capacity problem due to a lack of O&M practice.

This leads to the power production shortfall. Higher efficiency can be achieved by applying an

appropriate O&M practice with sufficient skills, so that the plant capacity can be recovered. In order to

comprehend the O&M situation in Bangladesh as a whole, the JICA study team carried out screening

with the following selection criteria, and then, selected some target sites for rehabilitation and

conversion to combined cycle as remodeling plans. The screening criteria are shown below.

(a) BPDB owned

Grounds: BPDB is the largest generation public company in Bangladesh

(b) Operation period: more than 10 years, less than 30 years

Grounds: 10 years of experience in O&M is preferable.

A unit older than 30 years may have large-scale malfunctions regardless of the application of the

remodeling plan, therefore, 10-20 year long stable operation may not be expected after the

completion of the remodeling works.

(c) Larger than 100MW

Grounds: There is little to expect from the rehabilitation effect on a small power unit.

(d) Availability higher than 30%

Grounds: This means the plant is very useful, and will continue to be vital in the future.

(e) Lowered output or efficiency

Grounds: A large effect can be expected.


Figure 1-58 Site Selection


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Figure 1-59 Target Site List

The study was performed based on interviews with and questionnaires for the representatives of the

target power plants. The results are categorized into Human Resources, Facility, Finance, and,

Information, which are commonly referred to as organizational resources in management of an

enterprise. As shown in the table below, the problems exist across the organizational resources.

Table 1-13 Problems in Organizational Resources

Core Missions

and Areas Human Capital Facility Finance Information

Generation

Capacity － Unit failure.

Aging. －－

Daily Operation Insufficient employee

rotation.

Lack of practical

training equipment.

Insufficient training

facilities.

－－ Lack of efficiency

management.

Maintenance &

Repairs

Insufficient employee

rotation.

Lack of practical

training equipment and

material.

Insufficient training

facilities.

－ No budget. －

Maintenance

Planning and

Budget Creation

－－ No budget.

Absence of

supporting data for

maintenance plan and

shutdown permission.

Lack of evaluation

process.


While solutions to each problem are proposed in (2) Targets to Achieve, in accordance with the


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analytical method based on the organizational resources, some of the problems still remain unsolved in

the tree, which are:

Lack of standards for replacement

LTSA does not exist

Lack of standards for maintenance

Absence of legal enforcement

These are firmly connected with the legal framework which should be enacted by the government.

As the development of the legal framework has been examined in detail in the previous subsection, it

is not described in this section. However, it is possible for owners of power generation facilities to

conduct regular inspection without a legal regulation. It is necessary to make them aware that regular

inspection at short intervals will lead to long-term stability of output and the sustainable profitability

of power generators.


As a facility enhancement solution for the capacity problem, this Study proposes rehabilitation and

conversion to combined cycle. It also proposes the following plans to facilitate regular maintenance

which requires information management and plant crew trainings.

Table 1-14 Solution Proposals

Core Missions

and Areas Human Capital Facility Finance Information

Generation

Capacity

－

Steam turbine

rehabilitation &

conversion to

combined cycle.

Scheduled

maintenance.

－－

Daily Operation Training center

equipped with

simulators and hi-tech

training materials.

Work rotation.

－－

Collection of unit data

and fuel data, and

efficiency monitoring.

Maintenance &

Repairs

Training center

equipped with real

machines and hi-tech

training materials.

Work rotation.

－ Mid-to long-term

maintenance budget. －

Maintenance

Planning and

Budget Creation －－

Procurement based on

maintenance plan.

Financial efficiency

monitoring and cost

optimization

Database for budgeting,

shutdown planning,

investment decision

making and evaluation.


The study team proposes the following feasible plans to implement the solutions above, which are

considered to be effective in human capital development, facility enhancement and efficiency

improvement in financial decisions.

The human capital development proposal includes a new training facility with a practical training

system (Training Center). The Training Center is purported to provide trainees with:

High-tech education for new power facilities.

Practical training courses and opportunities to experience real operations and maintenance

practices.

Education for certifications in compliance with laws and regulations.

In order to meet the training demand, the study mentions about inviting trainees to Japan during the

construction of the training facility.


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The facility enhancement proposal is based on a B&S (build and scrap) unit remodeling plan possibly

applied to Haripur and Fenchuganj. Compared to the other plans, the B&S plan has smaller impacts on

the production level of the power station. The capacity of the combined cycle unit is expected to be

100MW, which is responsive enough to fill the gap in the case where the frequency fluctuation

indicates a gap between peak demand and supply.

A 100MW combined cycle unit has the following advantages:

Quick start, short ramp-up (2 hours to reach the full load capacity).

High efficiency in the low load range.

Cost efficiency.

In order for the authority to improve efficiency in financial decisions, creation of mid-to long-term

plans for procurement in alignment with facility maintenance plans is strongly recommended. The

delays in budget and procurement approval would be reduced or removed, which should encourage

plant managers to create feasible maintenance plans.

Costs for regular maintenance should be allocated over time.

Contingency reserve must be estimated based on failure/repair history.

Spare inventory should be maintained at an optimal level.

The budget process must be integrated across the power plants.

The implementation items of the proposed solutions are shown in the table below.

Table 1-15 O&M Solution Proposals and Implementation Plans SOLUTION ITEM DESCRIPTION

Facility Facility Enhancement

Rehabilitation and

Conversion

Scrap & Build/Build & Scrap remodeling for Fenchuganj and Haripur.

Human Capital Human Capital Development

Education System Technical support from Japan in creation of training curriculum and materials.

Training provided in Japan.

- Education for technological standards.

- Learning about roles of Chief Engineer.

Training Facility Construction of the facility.

Technical support for introduction of facility and equipment such as simulator.

Finance Efficiency Improvement in Financial Decisions

Budget Creation Synchronization with maintenance plans.

- Estimation for maintenance cost.

- Supporting data for budget approval.

- Mid to Long term budget creation in alignment with regular maintenance schedule.

Procurement Process

Optimization

Planning

- Procurement process redesign.

- Spare inventory control.

- Cost reduction planning.

Procurement Efficiency Monitoring

- Budget control and delay management.

- Financial efficiency monitoring.


If BPDB has managed to establish a system for the centralized management of the data on the

operation and the plans and records of repair of all the plants under its control, as a financial measure,


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it will be able to estimate the budget for the entire organization and to plan for the suspension of the

plant operation and, thus, the delay in the approval of budget and suspension of the plant operation

will be reduced. The implementation of measures to solve problems in the information sector is

considered to improve the activities in the red rectangles in the figure below. It is considered that the

information can be used effectively in facilitating the solution of various problems in the operation of

power plants in general including problems concerning human resources, facilities and budget and

improving the O&M activities.


Figure 1-60 O&M Efficiency Improvement Supported by Information Management

One of the advantages of information management is that scheduled shut down for maintenance can be

aligned with demand and supply trends. This practice mitigates shutdown impacts on the grid.


Figure 1-61 Demand/Supply and Shutdown Planning

(3) Roadmap

In the area of operations and maintenance, the goal is to achieve efficient use of the enterprise


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resources. However, the first step towards practices of operations and maintenance needs to be legally

obliged, which guarantees implementation of regular maintenance. It also facilitates prompt decision

making on shutdown schedules and permissions. In the figure below, an O&M roadmap for

implementation of the proposals is shown along with the implementation plans for the legal

framework.

Source: JICA Survey Team Figure 1-62 Thermal Power Plant O&M Roadmap

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Legal Framework

Strengthen Control by Government Legislation Enforcement

Self-management by Generators Certification Enforcement

Enhancement of Technical Aspects Technical Standards Application

Facility Facility Enhancement

Rehabilitation and Conversion Planning Contract and Construction Operation

Human Capital Human Capital Development

Education System Technical Support from Japan Training in Japan Operation

Training Facility Planning Construction Operation

Finance Efficiency Improvement in Financial Decisions

Budget Creation Synchronization with Maintenance Plan

Procurement Process Optimization Planning Procurement Efficiency Monitoring


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1.6.17 Tariff Policy


1) Current Status and Issues

(a) Electricity Tariff

Serious Financial Situation of BPDB caused by the difference between electricity tariff and supply

cost

The current electricity bulk rate is not set high enough to cover the whole electricity supply cost.

Hence, BPDB, as the single buyer, continuously receives a subsidy as a form of long term loan. To

improve this situation, the bulk rate should be increased but this means that the electricity tariff for

final consumers should also be increased. Electricity tariff increase might have a negative impact on

the national economy of Bangladesh.

Electricity tariff menu as measure for supporting low income households

The electricity tariff menu is categorized according to the volume of usage and a lower rate is set for

low income households. When Bangladesh increases the electricity tariff, measures for low income

households should be considered.

(b) Gas price

Difference between international gas price and domestic gas price

Currently, the domestic gas price is set at a lower level. However, if gas demand increases and

Bangladesh starts imports of gas such as LNG, and the gas price is not increased, the gas sector will

require subsidies from the government.

2) Results of analysis and challenges

If the electricity tariff and gas price are increased rapidly in a single year, it will effect a huge negative

impact on the national economy of Bangladesh. It is desirable to increase the electricity tariff and gas

price progressively.

GTAP was used to analyze the impact of electricity tariff increase and gas price increase on the

national economy of Bangladesh. The following model was used for the GTAP analysis.

Area category: Bangladesh, Asian countries, other countries in other regions.

Sector category: Agriculture, coal*, oil*, gas*, electricity, industry, service.

*only for analysis for gas price increase.

(a) Electricity Tariff

To analyze the economic impact of an electricity tariff increase on the national economy of

Bangladesh, impact in the current year only (single-year analysis) was first analyzed. The impact of a

price increase in 2014, the year when the latest data set can be obtained, was analyzed.

The following scenarios were set for the electricity price:


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Scenario (a): average electricity price increase of 10% in real USD

Scenario (b): average electricity price increase of 20% in real USD

Scenario (c): average electricity price increase of 30% in real USD

The above-mentioned percentages are increase rates in real USD. If we consider the average inflation

ratio from 2010 to 2014, 7.9%8, the ratios in nominal BDT become 19% in scenario (a), 29% in

scenario (b), and 40% in scenario (c).

In Bangladesh, the electricity price menu for final consumers is different from the size of usage.

However, as a methodological limitation of GTAP analysis, one average price increase ratio was set

for each scenario in the analysis (for example, one “average” 10% electricity tariff increase was used

for scenario (a) instead of different prices for different categories (e.g. 5% electricity increase for low

income households and 15% for high income households)).

The results of the analysis are shown in the following table. A 10% electricity tariff increase produces

a negative effect on real GDP of 0.72%, a 20% increase produces a negative effect on real GDP of

1.45%, and a 30% increase produces a negative effect on real GDP of 2.17%. If the electricity tariff is

increased rapidly, it produces a huge negative effect on real GDP as compared with GDP current

growth.

Table 1-16 Impacts of Electricity Tariff Increase on Bangladesh National Economy (single-year

analysis)

Index (a) 10% increase (b) 20% increase (c) 30% increase

Change ratio

(%)

in real USD

Change

amount

(million

USD)

Change ratio

(%)

in real USD

Change

amount

(million

USD)

Change ratio

(%)

in real USD

Change

amount

(million

USD)

Impact on

real GDP -0.72 -810.7 -1.45 -1618.6 -2.17 -2424.0

Impact on

real exports -0.28 -79.3 -0.56 -157.7 -0.83 -235.1

Impact on

real imports -0.27 -94.7 -0.55 -189.5 -0.82 -284.2


Next, the impact of a progressive increase of electricity tariff was analyzed. Under the assumption that

the cost of the electricity generation supply rises at 1.5% per year in real USD, the following scenarios

were set and the impact on the macro economy of Bangladesh was analyzed. Scenario 1 was set as the

electricity tariff becoming equal to the supply cost by 2021, scenario 2 was by 2031, and scenario 3

was by 2041.

Table 1-17 Scenarios of Electricity Tariff Increase: Case 1 (cost increase) Scenario Annual Increase in real USD

Increase in Cost 1.5%/year

(9.5%/year in nominal BDT in consideration of average inflation rate from

2010 to 2014)

Base Scenario 1.5%/year


2010 to 2014)

1 4.2%/year until 2021


2010 to 2014)

8 Source: World Bank data site


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Scenario Annual Increase in real USD

1.5%/year from 2022


2010 to 2014)


(10.7% in nominal BDT in consideration of average inflation rate from 2010

to 2014)

1.5%/year from 2032


2010 to 2014)



2010 to 2014) Source: JICA Survey Team

Table 1-18 Scenarios of Electricity Tariff Increase: Case 2 (no cost increase) Scenario Annual Increase in USD

Increase in Cost 0%/year

Base Scenario 0%/year + minor fluctuation in the model calculation



2010 to 2014)

0%/year + minor fluctuation in the model calculation from 2022



2010 to 2014)

0%/year + minor fluctuation in the model calculation from 2032



2010 to 2014) Source: JICA Survey Team

In comparison with the single-year analysis, the increase per year become small and the annual

negative impact will be mitigated. Electricity tariff increase in Case 1 decreases GDP by 0.17%/year in

2014, and 0.26%/year in 2021, in Scenario 1. Electricity tariff increase in Case 1 also decreases GDP

by 0.07%/year in 2014, and 0.17%/year in 2031, in Scenario 2. Electricity tariff increase in Case 1

decreases GDP by 0.04%/year in 2014, and 0.15%/year in 2041, in Scenario 3. In Case 2, similar

impacts are expected. Furthermore, in the long run, negative impact on GDP is mitigated as compared

with a sharp rise in the single-year analysis.

Table 1-19 Impacts of Electricity Tariff Increase on Bangladesh National Economy (Case 1)

Scenario 2014 2021 2031 2041

Scenario 1 -0.17 -0.26 -0.06 -0.06

Scenario 2 -0.07 -0.09 -0.17 -0.06

Scenario 3 -0.04 -0.06 -0.1 -0.15 Source: JICA Survey Team

Table 1-20 Impacts of Electricity Tariff Increase on Bangladesh National Economy (Case 2)

Scenario 2014 2021 2031 2041

Scenario 1 -0.17 -0.26 -0.04 -0.04

Scenario 2 -0.07 -0.09 -0.15 -0.03

Scenario 3 -0.04 -0.06 -0.09 -0.12 Source: JICA Survey Team


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(b) Gas Price

To analyze the economic impact of a gas price increase on the national economy of Bangladesh, the

impact in the current year only (single-year analysis) was first analyzed. The impact of a price increase

in 2014, the year when the latest data set can be obtained, was analyzed.

The following scenarios were set for the gas price:

Scenario (a): average gas price increase of 50% in real USD

Scenario (b): average gas price increase of 100% in real USD

The above-mentioned numbers are rates in real USD. If average inflation ratio from 2010 to 2014 is

considered, 7.9%, the ratios in nominal BDT become 62% in scenario (a), and 116% in scenario (b).

The results of the analysis are shown in the following table. A 50% increase in the gas price produces a

negative effect on real GDP of 1.26%, and a 100% increase produces a negative effect on real GDP of

2.47%. The result shows that the impact of a rapid gas price increase on real GDP is relatively high in

comparison with GDP current growth.

Table 1-21 Impacts of Gas Price Increase on Bangladesh National Economy

(Single-year analysis)

Index (a) 50% increase (b) 100% increase

Change ratio (%)

in real USD

Change amount

(million USD)

Change ratio (%)

in real USD

Change amount

(million USD)

Impact on real GDP -1.26 -1407.9 -2.47 -2759.1

Impact on real exports -0.72 -204.7 -1.35 -382.8

Impact on real imports -1.36 -472.6 -2.70 -937.7

Source: JICA Survey Team Next, the impact of a progressive gas price increase on the national economy of Bangladesh was

analyzed. The following scenarios were set for the analysis. Scenario 1 was set as a progressive gas

price increase to the desirable level considering the international price by 2021, scenario 2 was by

2031, and scenario 3 was by 2041.

Table 1-22 Scenarios of Gas Price Increase

Scenario Annual Increase of Gas Price in real USD

Base

Scenario

0%/year

1

47.2%/year until 2021

(58.8% in nominal BDT in consideration of average inflation rate from 2010 to

2014)

0%/year from 2022

2


(26.6%/year in nominal BDT in consideration of average inflation rate from 2010 to

2014)

0%/year from 2032

3


(19.3%/year in nominal BDT in consideration of average inflation rate from 2010 to

2014) Source: JICA Survey Team

The result shows that the negative impact is mitigated by retarding the speed of increase.

Gas price increase decreases GDP by 0.33%/year in 2014, and 5.13%/year in 2021, in Scenario 1. Gas

price increase decreases GDP by 0.02%/year in 2014, and 2.82%/year in 2031, in Scenario 2. Gas


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price increase produces a positive impact in 2014, and a decrease of 1.08%/year in 2031, in Scenario 3.

Negative impact on GDP in the current situation (e.g. in 2014) is mitigated as compared with a sharp

rise in the single-year analysis.

Table 1-23 Impacts of Gas Price Increase on Bangladesh National Economy

Scenario 2014 2021 2031 2041

Scenario 1 -0.33 -5.13 0.52 0.18

Scenario 2 -0.02 -0.43 -2.82 0.09

Scenario 3 0.04 0.19 -1.08 -0.32 Source: JICA Survey Team


1) Electricity tariff reform

(a) Increase of household electricity price

Bangladesh should increase the domestic electricity tariff. BPDB should decrease subsidies and

increase the electricity bulk rate and electricity tariff to cover the whole supply cost. Due to concerns

regarding low income households, the category for lower income households should not be increased.

The electricity tariff menu is categorized according to the volume of usage. A lower rate is set for low

income households. When Bangladesh increases the electricity tariff, measures for low income

households should be considered.

(b) Discussion among stakeholders

An appropriate scenario for increasing the electricity price should be set in consideration of the

negative impact on GDP. Therefore, the related ministries should discuss this. It is recommended for

Bangladesh to organize meetings with related ministries and develop a plan for the electricity tariff

increase.

2) Capacity building of human resources for financial review

Public acceptance of an electricity tariff increase will not be achieved without sufficient effort to

increase the supply cost. Therefore, chances to reduce the supply cost should be identified and an

increase in tariff should be proposed with the reduction of supply cost.

It is difficult for third parties to get involved in the cost reduction process because much information is

confidential within companies. First, it is recommended for BPDB to launch a special team to

determine processes that are inefficient in terms of cost. It is difficult to change the conditions of a

signed contract, so it is recommended to establish a structure to check cost efficiency when BPDB

makes new contracts. Support from donors such as JICA for capacity building is beneficial.

3) Gas Price Reform

Increase of gas price

In line with the importing of natural gas, the gas price in Bangladesh should also be increased.

However, the price in the category for minimum usage should be maintained as a measure to support

low income households. The gas price menu is categorized according to the volume of usage. A lower

rate is set for low income households. When Bangladesh increases the gas price, measures for low

income households should be considered.

(3) Road Map

1) Electricity price reform


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The draft ideas for scenarios for increasing the electricity tariff are the ones used in the analysis. It is

recommended to set the average increase of electricity price until 2021, 2031, and 2041 according to

the scenarios in Table 1-24.

Table 1-24 Example of Scenarios for Electricity Tariff Increase

Scenario Annual Increase in USD

1


(12.4%/year in nominal BDT in consideration of average inflation rate from 2010 to 2014)

1.5%/year from 2022


2



1.5%/year from 2032





2) Development of Cost Reduction Plan

BPDB should launch a special team for cost reduction as soon as possible. Preferably by 2017 or 2018

the special team should be ready to start analysis.

3) Gas Price Reform

It is recommended to increase the gas price in line with scenarios such as those proposed in the

analysis. However, in consideration of the supply cost increase, in Scenario 1, a 1.5%/year increase

should be applied after 2022, and in Scenario 2, a 1.5%/year increase should be applied after 2032 to

make them more realistic.

Table 1-25 Scenarios of Gas Price Increase

Scenario Annual Increase of Gas Price in real USD

1



1.5%/year from 2022

2



1.5%/year from 2032

3 10.6%/year until 2041




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1.7 Road-map

To achieve VISION 2041, a road map has been prepared as Bangladesh’s long term strategic power

and energy development planning. The road map, classifiying into three timeline; short, mid to long,

and super long, states specific targets to be achieved, and also shows by when, what items that the

government of the Bangladesh shall implement. It is strongly desided that all indicated items on road

map shall be implemented for certain to achieve VISON 2041.


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Table 1-26 Roadmap for PSMP2016

Target Action Plan

Incentive for promoting foreign direct investment (Preferential Taxation)Other,

Deregulation (Abolishment of entry regulation)

Implementation of program for improving skill

Construction of industrial complex and SEZ

Other, Transportation infrastructure improvement(Port, Road, Railway)

Implementation of recommendation by EECMP

A-Appliance-labeling

B-Energy management (reporting)

C-Energy-saving building code

D-Low interest loan program for EEC equipment

Program of Ecologically friendly car

Improvement of road network

Improvement of railway network

Revised PSC to attract IOCs

International Tender for new onshore and offshore acreage

Partnership between foreign investor and BAPEX、BGFCL、SGFFL

Revise the role of BAPEX

Transform the capacity of BAPEX

Acquisition of oversea energy asset

Development of legal framework regarding efficient use of gas

Improve efficiency towards international standard and decommission of

inefficient facilities

Introduce electronic mapping system for gas transmission and distribution system

Introduce gas flow monitoring and safety management system

Import duty/levy on glass-fiber biogas digester/material removal

Glass-fiber biogas digester domestic manufacture development

Glass-fiber biogas digester roll-out through IDCOL loan scheme

Introduction of LNG LNG F/S, FEED, EIA and Land Acquisition

Construction of onshore LNG Terminal (3 sets of tank) to be operational from

2027. Additional tank will be installed after COD of 1st Phase.

Prepare strategy for LNG procurement

Construction of pipeline to connect into onshore pipeline

Commencement of commercial operation

Impact study of LNG introduction to existing gas infrastructure and gas

processing facilities

Construction of FSRU and related infrastructure of 1st and 2nd Phase

Commencement of commercial operation

Implementation of F/S Imported Coal infrastructure

CTT　(Phase1～2)FY2025, FY2029

Construction based on F/S

CTT (Phase1)commencement of operation in 2025

CTT (Phase2)commencement of operation in 2029

Establishing technology acquisition system for Bangladesh in order to secure

stable production at Barapukuria Mine

Establishing a system in order to proceed to new mining development mainly in

Bangladesh

To be crystallized after 2017

Commercial Operation in 2021

Commencement of Construction after 2022

Commencement of production after 2027

Review the result of pilot operation of Barapukuria Mine and commencement of

small scale open-cut mining of Phulbari Mine after 2021

Commencement of construction after 2025

Analysis b/w domestic refinery and oil product import completed and decision

made

Exit strategy on oil subsidy established and implemented

Oil import facility (storage tank or domestic refinery) developed to meet

increased oil demand

Energy mix: 3E-Value(Economy/Environment/Energy Security)

Capacity building for MP revision

-Collaboration between organizations for MP

-Periodical rolling revision for milestoned-MP

-Strengthen comprehensive statistical work function

-Introduction of KPI management

Improvement in the investment climate

-PPA improvement

-FDI improvement

-Prompt procedure of invenstment application

-Introduction of financial credit approval by Int'l Organization

No load shedding

Exiting from high cost rental power

Securing low cost power supply for baseload

Integrated energy infrastructure (Port facility for fuel terminal)

Tariff reform

O&M reform

4. LNG Supply

Contents of PSMP2016Sort Term

FY2016～2020

Mid-Long Term

FY2021～2025/ 2026-2035

Acqsition of energy assets in

overseas

Efficient use of Gas

Introduction of advanced

operation and infrastrucure

management system

Domestic biogas

production: 790,000m3/day

(including additional

600,000m3/day by 2031

and 3 million m3/day by

2041

6. Oil Supply Oil imprt 30 million tons/yr

Onshore LNG Terminal to

Supply 3,000 mmscfd of

Gas by 2041

FSRU to Supply 500 mmscf

of Gas by 2019

5. Coal Supply

Super Long Term

FY2036～2041

Economy1. Economic

Development

High-income country by

2041

Introduction of IOCs which

has technological and

financial advantages

Energy Balance

2. Primary Energy

Demand

Reduction of energy

intensity by more than 20%

3. Domestic Gas Supply

Optimized energy mix7. Power Development

Plan

60 million ton to be

expected imported Coal by

2041

Mining technology

acquisition for Bangladeshi

Commencement of

construction for pilot site at

Barapukuria Mine based on

open-cut mining technology

Development Permission

for Digipara Mince,

Karaspir Mine

Small scale open-cut mining

of Phulbari Mine

Commencement of Construction

Barapukuria Mine

open -cut mining (2025)

Initial Phase Terminal Expansion

TransmissionDistribution

Initial phase completed and

commercial operation started (2027)

1st phase of FSRU completed and commercial

operation started (2019)

GDP per capita

11,000 USD (2041)

Energy intensity

3.42-->2.56 million USD/toe

Oil import: 5 --> 30 million tons/yr

Power for all

2nd 2023 start operation

1st 2018-19 start operation

Well-organized investment climate

Well-organized planning climate

Energy Mix-Min 3E


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Target Action Plan

Preparation of maps by 2018

Completion of Feasibility Study for a PSPP by 2020

Completion of Detailed Design by 2023

Commencement of Construction of a PSPP by 2024

Commissioning of the first unit of a PSPP by 2030

Transparent and competitive bidding process for utility-scale RE generation

project (1 project)

Completion of wind resource assessment

Technical standards and regulation/rules for RE grid-connection

Transparent and competitive bidding process

FIT and reverse auction system

Utility-scale solar project roll out

Removal of import duty and levy on high-quality glass-fiber biogas digester

Nurture of domestic glass-fiber biogas digester manufactures and dealers

Cost competitiveness of biogas over LPG maximized

Advanced development of the Case 3 line

Securing power transmission capacity in India

Direct connection of PSPP in Meghalaya state to Bangladesh system

Establishment of legal and implementation framework

Meeting IAEA safety standards

Establishment of fuel cycle management

Propoer knowledge about nuclear safety and public acceptance

Operation of nuclear power plants

Direct connection of Dhakka - Chittagong

Strengthening trunk lines for regional development

Transmission facility developed to meet increased power demand

Electrificaion for All by 2021

SHS waste management process established

Amendment of Electricity Act

Amendment of Grid Code

Amendment of NLDC's operational rule

Governor-free operation of new installed generator

- Engineering

- Construction

Commissioning and commencement of operation new installed plant from Jun

2015 to 2021

Implement plan based on the review of new installed plant After 2022

Fulfillment of new installed generator of LFC control

Strengthen monitoring by government

Strengthen utilities' self-management

Technology enhancement

Upgraded combined cycle thermal power plant

Building information management system

Establishment of traning center

Power tarrif increase

Gas tarrif increase

Energy Balance

Contents of PSMP2016Sort Term

FY2016～2020

Development of laws

Mid-Long Term

FY2021～2025/ 2026-2035

Super Long Term

FY2036～2041

9. Renewable Energy

Renewable Energy :

Maximizng generation

potential under the limited

land availability

Biogas production: 62

mmcfd by 2041

8. Hydropower

To be achieved for

realization of hydropower

development in the

Chittagong hilly area

Thermal power plant O&M

[Nuclear Power]

Development of nuclear

power up to 7,200 MW

Energy Cost and

Tarrif Balance15. Energy Tarrif Policy

No gap between tarrif and

supply cost

Power Balance

10. Power Import/

Nuclear Power

[Import Power]

Increase power import from

neighboring counties up to

9,000 MW

11. Power Transmission

Planning

Robust power system

development

12. Distribution

(Rural electrification)

13. Improving Power

Quality

Development of laws and

rules (obligation and penalty

etc.)

Implement ensuring

frequency adjustment

margin and control

14. Thermal O&M

2.6%/year 1.5%/year

10-20%/year 1.5%/year

Biogas production : 4 --> 62 mmcfd

Maximising RE

generation potential

under limited land

H: 5,500 MW

L: 3,000 MW

H: 8,500 MW

L: 5,000 MW

H: 8,500 MW

L: 7,000 MW

1&2 Units 5&6 Units3&4 Units


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2-1

Chapter 2 Recommendations on the Implementation & Monitoring of the

Master Plan

The issues required to be addressed with a scope wider than the scopes of subject-specific

development plans and those of individual sectors in the implementation of this master plan in future

and the monitoring of its progress, including some recommendations made in the preceding chapters,

are described in this chapter. The issues that were not considered to be the preconditions for the

formulation of this master plan, but which have to be considered in the monitoring of its

implementation and its revision in future are also described in this chapter.

2.1 Capacity building for master plan revision

2.1.1 Collaboration and Cooperation between Organizations involved in the Formulation of MP

In Bangladesh, the Power Division under the Ministry of Power, Energy and Mineral Resources

(MoPEMR) is responsible for developing power development plan, and the practical works are done

by the Bangladesh Power Development Board (BPDB). In the meanwhile, the Energy and Mineral

Resource Division under MoPEMR is responsible for the energy supply plan other than electricity and

the practical works are done by Petrobangla, Bangladesh Petroleum Corporation (BPC) and so on.

This study observed that, because of the separated administration between electricity and other energy

sources, there is no organizational structure that supervises the overall energy supply and demand in

Bangladesh comprehensively. As the domestic production of natural gas in Bangladesh is expected to

deplete whereas the energy demand will continue to increase rapidly, the country will need to depend

more on imported energy sources.

Considering this situation, the importance of developing an energy supply plan from a comprehensive

viewpoint is expected to gain importance for determining how to appropriate the limited domestic

energy production among various sectors and which energy sources to import for supplying to which

sector and how much.

In developing the aforementioned power development plan and energy supply plan, a systematic

relation among stakeholders is needed so that the responsibility of various data necessary for making

future projection such as the actual operational data and facility development plan is identified and

that these data are administrated in unity. Current status is that, as observed by the JICA Study Team,

relations among the organizations responsible for administrating these data are not sufficiently

established.

These power development plan and energy supply plan need to be updated regularly by reflecting the

conditional changes. Therefore establishing an institutional framework is necessary to develop and

implement both plans comprehensively by involving all the relevant stakeholders for these plans to

share information.

2.1.2 Periodical Rolling Revision of the Milestone Plan Although a PSMP has been formulated every five years as a milestone plan, its periodical revision based on

a rolling plan has not been conducted appropriately. In principle, a power supply plan in a power

development plan is formulated on the basis of demand projection and appropriate standards for ensuring

the reliability of supply. However, as the proportions of the projects mentioned in power development plans

that have reached the operation stage have been small, a list of prospective projects for investment tends to

be included in a power development plan as it is. In principle, a power development plan has to be revised

in accordance with power demand and the supply reliability standards as the planning and preparation for

projects progress. It is also necessary to revise the power development plan and the energy supply plan

formulated in this survey periodically, at least once a year, with changes in the situation including the state

of the economy, supply/demand balance of energy sources including domestically-produced natural gas and

power supply/demand balance taken into consideration.


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2-2

2.1.3 Strengthening of integrated statistical processing functions

BPDB has a record of electricity sales to its customers and those wholesaling to other distributing

companies. The total sum of them is the total volume of electricity sold by BPDB, but is not identical

with the total volume of electricity that is sold by distribution companies including BPDB and used by

end consumers. For analyzing the trend of electricity consumption in Bangladesh more specifically,

grasping the electricity sales of all distribution companies to end-consumers with sectorial breakdown,

such as residential, commercial, industrial etc., is more important. Power Division and/or BPDB is

suggested to take an initiative to develop a database of nationwide electricity consumption uniformly

as a routine.

The JICA Study Team also observed that there is no government agency responsible for grasping how

each sector (residential, commercial, industrial, transport etc.) utilizes energy as the combination of

various sources of energy supply such as electricity, natural gas, LPG, oil products, non-commercial

fuel (bio fuel) etc. When the JICA Study Team interviewed with various organizations, there were

some opinions that, in order to mitigate the increase of natural gas demand, new supply of natural gas

to residential sector and transport sector should be restricted and these sectors should be induced to use

LPG instead. However, if this idea is actually implemented without long-term perspective of energy

supply and demand, it may result in the rapid increase of LPG procurement that is apt to be costlier

than LNG, and the burden of nationwide energy cost may become heavier. In order to realize the

long-term optimization of nationwide energy balances, GoB needs to strengthen the function to

consider and coordinate the national energy policy comprehensively. Although it should be the Government of Bangladesh that decides which organization is to be responsible

for performing these integrated statistic processing functions, the Survey Team recommends the

establishment of Integrated Statistics Bureau in MoPEMR for the centralized management of all the data

from the organizations under the jurisdiction of the Power Division and the Energy Division with the need

to revise the power and energy master plan periodically taken into consideration.

2.1.4 Introduction of Key Performance Indicators

Furthermore, GoB is suggested to set appropriate KPIs (key performance indicators) in the process of

planning and to set quantitative target based on this, in order to indicate clearly the directions of

energy policy of Bangladesh. Above all, as the country’s energy demand is expected to increase

rapidly, target setting for rationalizing energy supply and demand (energy efficiency) is indispensable.

In addition, strengthening the capacity to analyze the effect of conditional changes on these KPIs and,

if necessary, to adjust the targets and plans flexibly to reflect the changes is also required.

Examples of KPIs that serve for target-setting for the power and energy sectors are as follows.

Energy efficiency: energy intensity per GDP (toe/million BDT), GDP elasticity of energy

consumption etc.;

Economy: cost per unit of energy supply (BDT/kWh) etc.;

Environmental consideration: emission factor of greenhouse gas etc.;

Stable supply of energy: energy security index (dependence on energy import, diversification of

energy sources), average frequency and duration of power interruption (SAIFI, SAIDI) etc.;

Optimized supply of energy: balance of aforementioned 3E (integrated indicator), composition of

energy source mix etc.;

Currently the main stakeholder agencies in Bangladesh do not have sufficient organizational and staff

capacity to deal with these new challenges and international support for improving the capacity of

planning, policy implementation and monitoring/evaluation is also needed. Japan has also provided

various kinds of assistance such as the dispatch of policy advisors, training programmes and capacity

development support programmes. These kinds of assistance will still be needed for Bangladesh.

2.2 Measures to Facilitate Improvement of Investment Climate


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2-3

2.2.1 Outline

As a rapid economic growth is expected in Bangladesh, a power development plan has been

formulated to reinforce power generation facilities to meet the increasing power demand. However, as

the construction of power generation facilities has not been progressing as planned in reality, as

mentioned in detail in the chapter of the power development plan, the demand has been suppressed

due to the limited supply and, therefore, the difference between the actual demand and the demand

projection including potential demand has been large. This fact may have undeniably had negative

impact on the economic growth in Bangladesh.

It is obvious that the milestones in a power development plan, however theoretically the plan may

have been formulated, will be just empty theories in the current state in which various factors impede

the construction of power source facilities.

Therefore, a discussion conducted on the way to create a climate that makes investment in power

development attractive with opinions of investors taken into account is described in the following.


Figure 2-1 PSMP2010 Review (Power Development Plan)

2.2.2 Project Implementation Structure

In addition to conventional loan projects implemented with public financing from international

organizations, projects with PPP investment that utilize the technological capacity and capital of the

private sector more than the loan projects are considered a promising means of power development in

Bangladesh. The figure below shows a possible project implementation structure assumed for the

implementation of IPP projects in Bangladesh.

Sponsors

Government of Bangladesh

Power Purchase Agreement

BOT Contract

Investment Certificate

Fuel Supply Agreement

EPC Contract

Special Purpose Company (SPC)

Gov. Guarantee

BPDB Power Cell BIDAPower Div.

EPC

EPC Contractors

Fuel Supply

Fuel Suppliers

Sponsor

Equity

Lender

Debt

Lenders


Final Report

2-4


Figure 2-2 Organaization of IPP

The sponsor of a project consisting of a contractor and an investor usually minimizes the project risk

by establishing a special purpose company (SPC) and concluding contracts with various organizations

to be involved in it through the SPC. The major project risks are summarized in the following.

Risks directly concerned with the Government

Risks associated with power sales agreements and payment of electricity charges

Foreign exchange and remittance risks

Country and political risks

Risks to be controlled mainly by contractors

Risks of delay and cost overrun

Risks in fuel procurement

O&M risks (including risks in the construction of power transmission, transforming and

distribution facilities)

2.2.3 Risks directly concerned with the Government

In Bangladesh, an SPC and BPDP conclude a power purchase agreement (PPA) and the SPC becomes

the only off-taker of the power under the PPA. Because this agreement provides long-term security, in

principle, investors consider it an important agreement that promises profitability of their investment

in the project life. Investors prefer a large proportion of the payment for electric power to be made in

foreign currencies, while the investee prefers a large proportion of it to be made in the local currency,

as they collect electricity charges from users in the local currency. This proportion of the payment in

foreign currency has significant influence on investors’ decision on investment. If there is a restriction

on foreign exchange applicable to a case in which a SPC exchanges the profit from a project after

deducting the local costs that it has saved in the local currency in a foreign currency and remits it to

the country of the investor, such a restriction will also be an obstacle to the investment.

Power Division applies for the licenses and permits for the establishment of SPCs and construction of

facilities with a consent of Power Cell and applies for a government guarantee with a consent of the

Ministry of Finance. All the permission and licensing for investment in foreign currencies used to be

controlled by the Board of Investment, Bangladesh, (BOI). However, it is currently controlled by

Bangladesh Investment Development Authority, which was established recently as a one-stop center

for foreign investors. The government’s efforts in reorganizing itself in accordance with the needs of

investors such as the case mentioned above should be highly appreciated. A contractor for the

implementation of a project with foreign investment is required to be established as a joint venture

(JV) of a foreign investor and a local partner, and a foreign investor is not allowed to participate in

such a project as its sole investor in many countries, including Bangladesh, in order to facilitate the

development of domestic and local industries.

Successful project implementation naturally requires strict compliance with agreed rules and

provisions of the agreement, which requires minimization of the country and political risks as the

major precondition. These are the risk factors in the agreement directly concerned with the

Government.

2.2.4 Risks to be controlled mainly by contractors

The risk of delay and cost overrun is a risk to be hedged by contractors. The conclusion of an EPC

agreement between a SPC and an EPC contractor is a means to hedge such risk. The risk in fuel

procurement, which may emerge in different forms in different projects, is considered a risk to be

controlled by contractors. The O&M risk is also considered a risk to be controlled by contractors.

There is a risk that power may not be transmitted as planned when the power source facilities have

been constructed and put in use as planned, if a project for constructing transmission lines and

substations is delayed by various factors. If such a project is not in the scope of the investment in the

power source development of an investor, it is considered extremely difficult for the investor to control

the project concerned. Therefore, a mechanism that places the responsibility for the consequence of

the delay of the project to its contractor has to be established.


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2.2.5 Recommendations for Improvement

PPA

A PPA will stipulate the standards of tariffs that sufficiently accommodate various risks associated

with foreign exchange and international remittance. The privileges to receive electricity tariffs in US

dollars and transfer the revenue in dollars received from the sale of electricity overseas without

restriction will be granted to investors.

Tax exemption for FDI

The tax exemption to be granted will include exemption from the customs duties on all the imported

materials and equipment required for the plant construction, exemption from the corporate and

personal income taxes for a certain period of time and exemption from the import tax on vehicles and

heavy and specialized equipment to be used by contractors.

Streamlining of procedures

It is not sufficient just to establish better rules. It is also necessary to reduce the time required for the

issuance of licenses and permits.

Credit enhancement to local enterprises by international organizations A tripartite relationship of the political system, bureaucracy and private sector led by a local

large-scale company has been formed in many of the successfully implemented IPP projects in

Bangladesh. A foreign investor must form a JV with a local investor if the foreign investor intends to

implement such a project because there is a law that does not allow purchase of land solely with a

foreign currency in Bangladesh. Therefore, such a project will be implemented as a long-term joint

investment project with a local company to ensure steady cash flow into the project and the financial

credibility of such a local company may have significant influence on the decision of a foreign

investor. For example, an international organization will enhance credit limit of a local company as a

guarantor of its credit in order to improve its credibility in the local industry sector in a scheme to

implement large-scale IPP project as a “model PPP project.” In practice, a mechanism that guarantees

the payment of fees by guarantor in the case of breech of a provision in a PPA and fully covers damage

to a developer will be established.


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2.3 Economic Development

It has to be noted that the aforementioned economic projection is based on the assumption that the

Government of Bangladesh (GoB) will implement appropriate policy measures for economic

development. Currently, the economic development in Bangladesh is mainly driven by the steadily

increasing export of ready-made garment (RMG) industry that takes advantage of low cost of labour.

For achieving mid- and long-term economic development, it is indispensable that the national

economy will shift from labour-intensive industries like RMG to more value-added industries, and it is

necessary that policy support to promote these new industries.

Examples of policy support are the provision of incentives for promoting foreign direct investment

(FDI) from overseas and the development of infrastructure like special economic zones. An example

of soft measures to promote the development of high value-added industries is a capacity development

programme for human resources in the industrial sector to help advanced technologies to take root in

Bangladesh industries.

Following these observations, policy recommendations about economic development policy is

summarized as follows.

(1) Infrastructure Development

1) Short term

In order to promote the high value-added of manufacturing, especially the advancement of industries

through the attraction of FDI, development of fundamental infrastructure is indispensable, such as the

utility structure like electricity, gas and water, and the public transport infrastructure for distributing

materials and products. And the development and integration of production base that is equipped with

these infrastructures is supposed to be the key factor of success. In addition, provision of incentives

such as the waiver of tax and duty for mitigating the financial burden of huge amount of capital

investment is also an effective tool. Development of production bases to promote these industries,

such as EPZs (Export Processing Zones), SEZs (Special Economic Zones) and industrial parks is

strongly desired.

In Bangladesh, development of PEZs started from 1980s for promoting export industries and currently

right PEZs are in operation under the supervision of Bangladesh Export Processing Zones Authority

(BEPZA). In addition, Bangladesh Economic Zones Authority (BEZA) was established in 2010 for

fostering the development of SEZs eyeing for the diversification of Bangladesh industries. According

to the JICA Survey Team’s interview on BEZA in February 2016, there exist about 60 project plans of

SEZs and BEZA has a target of developing 100 SEZs in 15 years. In order to realize these plans and

targets effectively, this study suggests that a programme to develop the capacity of planning and policy

implementation for government agencies like BEZA is also needed, which shall be discussed more in

detail in the next section.

2) Mid/long term

Development of fundamental infrastructure for promoting industrial development may have

limitations only with the “point-wise” development like SEZs, PEZs and industrial parks. Connecting

these points into a trunk line, and then into a wide area, will enhance its effectiveness. Furthermore,

improving the convenience of connection among production bases will also help improving the

efficiency of supply chain in a manufacturing process and contribute to the “Banglazation” of supply

chain of export industries (self-containment of value chain from material to final product).

From this point of view, it is strongly recommended to prepare plans of comprehensive wide-area

infrastructure development that cover seaports, roads, railway, and energy supply and etc., and to

implement these plans steadily.


Final Report

2-7

In addition, reforms of economic structure will be indispensable for achieving long-term economic

development, such as further deregulation and liberalization of industries for simplifying the licensing

process and for enhancing the mobility of human resources and capital funds.

(2) Capacity Development

1) Short term

In order to promote the development of manufacturing bases for the advancement of manufacturing in

Bangladesh, such as SEZs, EPZs and industrial parks, it is necessary to make effective and realistic

plans of development and to implement them steadily.

Because the skills and experience of government agencies responsible for that may not be sufficient to

fulfill this, capacity development programmes to support this are also considered to be necessary.

Japan has provided assistance to Bangladesh in this field, such as “The Project for Development Study

and Capacity Enhancement of Bangladesh Economic Zone Development Plan Authority” (2015-2016)

and “Study and Verification Survey on the Comprehensive Development of Southern Chittagong

Region in Bangladesh” (2015-2016) that are sponsored by JICA. Technical support from abroad like

that will help enhancing the capacity development of government administration.

2) Mid/long term

For the long-term sustainable development of Bangladesh economy through the advancement of

industries, an overall bottom-up of human capacity in the industrial sector is essential. Examples of

supporting programmes are the establishment of facilities for technology education/training and the

project to assist the efficient acquisition of technologies through OJT (on-the-job training).

2.4 Domestic Natural Gas [Gas]

(1) Infrastructure

Gas production from existing gas field will be peaking out in 2017-18 and declining, while gas import

in a form of LNG is forecast to increase significantly in near future. Under the circumstances issues in

terms of infrastructure development to be reviewed and studied are as follows:

Domestic gas price will be linked with international gas price and more strict control and

monitoring of gas in/out flow will be required to avoid “lost profit opportunities”, and system loss

and/or leakage from the system should be minimized.

Gas flow will be changed from the east-west current to the south-to the rest of the nation, The

large amount of imported gas will be coming from Maheshkhali and/or Payra. Gas transmission

infrastructure will need to be reinforced and existing distribution system will also need to be

reinforced and re-constructed.

Operation mode will be shifting from “Gas Allocation” basis to “Customer Demand” basis, and

required to supply gas to meet the profile of each customer’s demand. Current supply system

needs to be reviewed.

Currently the three layers organizations are involved in gas supply, i.e., Gas Production Companies

(BAPEX, BGFCL, SGFL etc.), Gas Transmission Company (GTCL), and Gas Distribution Companies

(TGTDCL, BGDCL, JGTDSL, PGCL, KGDCL, SGCL). There is no integrated operation system

since there is no necessity under gas allocation system at this stage

In order to solve the above listed issues the well-planned and systematic approach will be required.


Final Report

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Industrial structure and lifestyle of people will be changing with development of economy. Role of gas

based electric power generators will be changing from base load generation to middle/peak shaving

generation, and numbers of new gas power plants will be constructed near metropolitan area (Dhaka).

Gas infrastructure should be planned and installed to coincide with those power plant installation

plans.

The most important is that Gas Sector and Power Sector should work together by organizing working

group jointly and share issues and determine exact location of the power plant, and associated power

grid and gas supply infrastructure.

On completion of gas and/or power infrastructure, more sophisticated operation system need to be in

place and trained operator and maintenance personnel need to be ready for work. However, this

capacity building task might not be easy. Assistance from Japan could be constructing and operating

an “electronic gas infrastructure” which supports operation and maintenance of the infrastructure

facilities, and transfer the system to the operating company at later stage (BOT). With this approach,

project schedule will be shortened and more time can be used to train the staffs.

1) Short term

Most part of gas infrastructure will not be visible from surface because they are buried underground.

Location of each gas piping components need to be identified by linking with GPS. First of all,

object orientated advanced electronic mapping system need to be introduced, combined with

appropriate SCADA (Supervisory Control and Data Acquisition) System. By this arrangement,

Advanced Control, Preventive Maintenance, Operation Safety, Emergency Transaction, and Asset

Management, will be attainable. Such system can be constructed and operated by Japanese entities and

transferred at later stage (build-own-transfer: BOT). Technology transfer will be easily implemented

under this proposed scheme.


Figure 2-3 Advanced Electronic Mapping - Object Model System

2) Mid term

As the imbalance of demand-supply situation improves with the increase of import LNG, operation

mode is changing from “Gas Allocation” to “Customer Demand” basis. Gas supplier is required to

supply gas to meet the demand profile of each customer. Gas supply source will be diversified. In

addition to domestic gas, introduction of LNG via FSRU and/or Land LNG terminal and pipeline gas

from India will be starting shortly. Gas customers will also be diversified with development of the

economy. In order to manage such changes integrated supply system and central operation unit will


Final Report

2-9

need to be constructed. Current gas supply organization may need to be reviewed and re-organized.

Introduction of IT is accelerated in future and operation system will be improved and need to be more

flexible based on advanced data acquisition, processing and control system. JICA has assisted in

introducing pre-paid gas meter to domestic users as part of yen-loan financed project. This system

would be integrated into part of IT system in future.

(2) Human capital development and supporting organization (capacity building)

1) Short term

Currently, it is understood that the numbers of gas leak incidents are reported daily (details are not

precisely understood at a gas distribution company). Most of which presumably are caused by poor

maintenance, use of low grade materials, and/or poor construction practice. To enhance the reliability

and integrity of the gas infrastructure system, it is necessary to set up design standard (such include

piping material standard, standard construction drawings), construction work procedure and

maintenance/safety procedures.

In order to bring up staffs who are able to manage advanced operation and maintenance of gas

infrastructure, knowledge and skill based qualification system should be introduced. Personnel system

may also need to be reformed.

2) Mid/long term

In addition to manage advanced operation and maintenance of gas infrastructure, managers are

required to promote efficient use of gas. Wide range of knowledge and practical skills are required to

be a manager. It is important to bring up internationally recognized professional engineers in the

organization. Professional engineers will take such responsibility as they are seen in major oil

companies and utility sector of advanced countries. Chartered Professional Institution in UK may be

able to support the education and training programs.

Responsibility of such engineers will be extended to prepare operation and maintenance manuals to

suit by themselves.


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2.5 LNG Import [Gas]

FSRU Project is under progress and study of land based LNG terminal project has also started.

However, each has its own characteristics and need to understand the differences. Prior to develop

LNG project, following matters need to be taken into consideration:

Price formula of LNG Long term Take or Pay contract

Use of LNG spot market

LNG Freight and tanker size

Storage/gasification service fee

Construction schedule and risk

Operational risk and energy supply security

Construction schedule of FSRU is 3years at the most and construction risk is considered low, and

therefore FSRU is considered reliable source of supply. LNG supply to FSRU will be based on “take

or pay” and risk of “quantity” should be beard by Bangladesh. FSRU require more than 60 times of

LNG delivery by shuttle tankers. Operation of FSRU is vulnerable to Cyclone and/or rough wave

conditions because of ship to ship transfer operation of LNG.

Land based LNG terminal will play a role of supply optimization between supply and demand. It also

plays important role in securing energy supply if it is used as a strategic storage, and considered

inevitable energy infrastructure in Bangladesh. Compared with FSRU, freight unit cost will be lower

since larger vessel such as Q-Flex and Q-Max class can be used to deliver LNG. Initial storage and

gasification service fee is higher since it should support the initial infrastructure investment cost,

however the fee will be lower and competitive with the expansion of storage capacity to meet the

increasing demand. Construction will take 7-10 years to complete before commencement of

commercial operation.

LNG terminal operation will be assigned to RPGCL (CNG & LPG Company), if it is planned by

Petrobangla (a LNG terminal project under Power Cell and BPDB supported by IFC would be

operated by different scheme. Further detail is described in the “LNG” Chapter). Gas produced at the

LNG terminal will be handed over to GTCL (Transmission Company) and transmitted and handed

over to Distribution Companies for supplying to customers. Gas allocation system worked under such

system for long time.

Once large amount of gas is started to be delivered from LNG Terminal, gas allocation system will

need to be changed to new delivery system, i.e., customer demand based supply system. This new

supply system will work under integrated operation system connecting among LNG terminals,

transmission lines, and gas distribution systems. Central operation unit with the task of controlling and

monitoring all the in/out gas flow will need to be constructed. Current organization may need to be

reviewed and restructured.

(1) Infrastructure

1) Short term

Industry of Bangladesh has suffered from shortage of gas supply and adversely affected economic

growth of the country. The first FSRU should be constructed soonest and associated transmission line t

as well. Design of current transmission line under construction is 90 km long, 30 inch diameter with

pressure rating of #600, capable of transmitting 500-700 mmcfd at normal operating pressure of 900

psig. However, this pipeline is considered too small to accommodate further future gas delivery. New

transmission system should be studied by the working group organized jointly between Gas Sector and


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Power Sector, and share issues and determine future delivery plan.

Advanced gas supply system can work only under the sophisticated pressure/flow control system.

Changing pressure of the transmission pipeline system may adversely affect performance of

condensate recovery unit at gas field, as well as the operation performance in the downstream

distribution. This potential impact needs to be investigated further.

2) Mid/long term

Land LNG terminal require 7-10 years to construct. It will play a role of supply optimization between

supply and demand. It also plays important role in securing energy supply if it is used as a strategic

storage, and considered inevitable energy infrastructure in Bangladesh. LNG storage capacity will

continue to increase with the increase of demand. Gas transmission and distribution infrastructure will

also be reinforced and expanded. Mid/long term plan should be prepared to minimize future cost and

avoid duplication of works. Joint working group between power and energy sector to be organized for

this purpose also.


1) Short term

On completion of gas infrastructure, operation system needs to be in place and trained operator and

maintenance personnel need to be ready for work. Assistance from Japan could be constructing and

operating an “electronic infrastructure” which supports operation and maintenance of the

infrastructure facilities, and transfer the system to the operating company at later stage (BOT). With

this approach, project schedule will be shortened and more time will be used to train the staffs.

2) Mid/long term

As stated in the previous paragraph, it is important to bring up internationally recognized professional

engineers in the organization. Professional Engineers will take responsibility of managing advanced

operation and maintenance of gas infrastructure, and promote efficient use of gas. Major oil companies

and utility sector of advanced countries relies on their operation on this type of people. Chartered

Professional Institution in UK may be able to support the education and training programs.

Responsibility of such people will be extended to prepare operation and maintenance manuals to suit

by themselves.


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2.6 Renewable Energy [Introduction of energy storage technology]

(1) Infrastructure

Integrating intermittent renewable energy resources, such as PV and Wind generation, to achieve CO2

emission reduction is a priority task for most countries worldwide. However, such renewable

resources have high initial cost, low utilization rate and intermittent generation. Therefore, when

integrated into the grid in large scale, they could put system frequency and voltage stability in

jeopardy and cause technical problem.

On the other hand, in parts that have no access to the grid (off-grid areas), Solar Home System (SHS)

or small-scale diesel generation provide electricity. However, SHS are expensive and cannot supply

more than 3 to 4kW, also small-scale diesel generators have fuel running cost in addition to the initial

cost. Therefore, off-grids areas have not only high failure rate but also a very high electricity cost.

To address such issues, increasing renewable energy integration while maintaining electricity supply

stability, large-scale and safe energy storage technology is proposed as a supporting measure, and a

practical introduction is highly expected.


Figure 2-4 Introduction of energy storage technology (1)

1) Short term

Improved grid stability through integration of large scale and safe energy storage system

As mentioned above, in case of integrating large scale intermittent renewable energy sources

in power system, frequency and voltage fluctuations are anticipated.

Up to now, hydro pumped-storage units have been utilized to solve the above issues, however

considering required construction cost, time and area, large scale energy storage systems have

superior characteristics for absorbing power system fluctuation by electrical energy charge and

discharge. Therefore, such solutions are being closely focused in North-America. A pivotal

point in realizing large scale energy storage systems is its safety.

Considering above mentioned conditions, it is proposed to have a demonstration project F/S in

order to connect safe large scale energy storage system to grid, develop operation and control

technology and evaluate the integration effect.

Realizing safe, low cost and environment-friendly Off-Grid energy supply system through

integration of large scale energy storage system In remote areas that don’t have access to grid (off-grid), energy storage can be used to replace

SHS and diesel generators through community energy schemes instead of providing energy

system for each individual house. (Medium to large scale solar systems + large scale energy

storage system for community). Using such scheme, it might be possible to addressee above

mentioned issues. Therefore, F/S for evaluating the system integration effects is proposed.

50/60Hz Thermal &

Nuclear

Power

Home → Smart home Building → Zero Energy Building Factory → Smard Factory

EV Battery Fuel cell

RE

Increasing RE integration

< Frequency Fluctuation Image > < Solar Home System (SHS) >


Final Report

2-13

Redox Flow battery is one of the most well-known large-scale and safe energy storage technologies.

Some of the application samples can be shown as follows.

[1] Improved grid stability

METI’s demonstration project from FY 2013 to FY2018

Installation site : Minami-Hayakita Substation at Hokkaido Electric Power Co., Ltd

Sytem : Redox Flow battery system 15 MW / 60 MWh

Application : Frequency regulation (Short duration)

Surplus power adjustment (Long duration)



[2] PV + Large-scale energy storage

Sytem : Redox Flow battery system 1 MW / 5 MWh

Application: Storage of PV surplus generation, PV output stabilization, etc.

Sysytem appearance



PV output

Battery output

Total output

PV output

Battery output Scheduled output

< System appearance > < Demonstration image >

WF output

Redox Flow battery

PV output

Dispatch Center

Dispatch

Freq. Discharge

Charge


Final Report

2-14

2) Medium term

Introducing large scale energy storage based on the F/S results


1) Short term

Training for operators and creating operational manuals

It is important for the large scale energy storage operator to have a sound knowledge about functions,

responsibilities, operation and maintenance, economics of the systems and etc. Together with the

above mentioned F/S study, there would be a training for the large scale energy storage operators and a

manual would be provided form the achieved operation know-how. This will layout foundation for

safe and low cost energy supply as well as suitable O&M support in Bangladesh.

2) Medium term

Creating ancillary service market foundation The need for ancillary services and large scale energy storage systems would be increased due to the

expansion in renewable energy resources. To correctly evaluate this value and realize suitable balance of

energy resources, creation of an ancillary service market would be necessary.

2.7 Power System Plan

(1) Infrastructure Arrangement


The projects listed in the table of on-going projects made by PGCB will be steadily implemented.

The funding sources should be identified soon for the projects that have not yet been funded, such as

the expansion and strengthening of the network in DESCO’s management area (400kV GIS

substations and 230kV substations). Regarding the projects for the bulk power transmission system

related to interconnections, such as Barapukuria, their funding sources should also be identified in

adequate time, in cooperation with the progress of the discussions with the related neighboring

countries. Regarding the projects for the transmission lines for power transmission from the large scale

power stations in south Chittagong and Khulna that are identified in this MP, their FSs are

implemented accordingly at suitable timings in order to match the construction schedule and urgent

selection of the routes for transmission lines.


The projects listed in the table of on-going projects made by BREB will be steadily implemented. In

the process, it is important that a distribution system which aims at high reliability in the future is

constructed efficiently.

(2) Strong Institutional Arrangements


PGCB takes on the role of making plans for bulk power transmission lines and substations. Although

consistency among the bulk power network plans and power demand forecasts, power generation

plans and power distribution plans should be ensured, these plans and conditions are set by

organizations other than PGCB. The power demand forecast for the whole of the nation is made by

BPDB and the regional ones are made by power distribution companies. Power generation

development plans are made by BPDB under the management of Power Division in MoPEMR. The

power distribution plans are made by distribution companies such as DSCO and DPDC.

The results of the plan for the bulk power transmission system made by PGCB are reflected in the

power transmission and distribution plans made by distribution companies and become the conditions

for planning the 132kV system. The appropriate feedback should also be given to BPDB and Power


Final Report

2-15

Division in MoPEMR on the power network plan made by PGCB, in order to reflect its results and

correct information in the Government to Government projects. The following countermeasures

should be implemented.

The institutional frameworks should be established among BPDB, Power Division, Distribution

Companies and PGCB to share the necessary information periodically in order to make the power

network system plan.

The reports on the power network system plan are published periodically (every half-year or

annually) to share information on the status of making the plan among the abovementioned

related organizations. PGCB reports on the future projects for transmission lines and substations

required, from its technical viewpoint, to BPDB, Power Division and distribution companies.

The rules for power network system planning should be clarified, published and open to the

public as a part of the Grid Code.


In this sense, a good communication and coordination between BREB and IDCOL is required;

however, it is observed that such communication or coordination is not taking place. IDCOL is

communicating to BPDB for project planning, but BPDB seems not liaising with BREB properly. If

the Government seriously pursue the achievement of “Electrification for All” by 2021, the good

communication and coordination between BREB and IDCOL must be taken, and both parties (and

BPDB as a coordinator too) need to improve in this area.

2.8 O&M Legal Framework [O&M]


1) Short term

The Bangladeshi government would organize a specialized committee which legislate some act related

O&M.

In terms of short term, the suitable method of bringing up talented person in specialized committee

would be that they study to development some laws related to O&M under the specialist's instruction

after the specialist for making O&M act in developed country, like Japan, invited from overseas to

Bangladesh.

It is highly likely to be difficult to enact laws and regulations mandating regular inspection and to

establish a system for the supervision of the facility maintenance by authorities in a short period of

time. It is worth studying the feasibility of taking proactive measures such as introduction of various

regulations and technical standards for the maintenance of power generation facilities used in Japan as

the standards for the maintenance of power plants in Bangladesh and maintaining the plants using the

introduced standards before the enactment of all the required laws and regulations. It is recommended

that the power plants to be constructed, in particular, be operated in accordance with a schedule that

includes the schedule for the maintenance from the beginning of their operation.

2) Mid/long term

In terms of mid-long term, one of solutions developing human resources is that the members of

legislation committee would be dispatched to developed foreign country to learn the real O&M legal

framework and actual situation of O&M in a power plant, and the members might bring back

knowledge of the useful laws to Bangladesh. In addition that is better to continuous study the

operation status of power plant in developed nation, and also research the history of O&M act

reformation, that would become to good samples for Bangladeshi O&M act.


Final Report

2-16

2.9 Thermal Power Plant O&M [O&M]

(1) Infrastructure

1) Short term

In the short term, we consider that enhancement of power generation capacity is a priority in order to

meet the demand growth and requirements from the industrial sectors. In particular, some of the aging

power facilities need to be replaced with, or converted into higher efficient units. The study team

proposes two plans as power plant remodeling plans. One is a rehabilitation plan for old steam

turbines which were built by Russia. The other consists of three different levels of conversion into

combined cycle units. Those plans can be implemented with proven technologies of Japanese

engineers.


Figure 2-7 Steam Turbine Rehabilitation Plan


Figure 2-8 Combined Cycle Power Generation Remodeling Plan


Final Report

2-17

2) Mid/long term

Those proposals mentioned above can be a quick solution to the power shortage problem of Bangladesh for

a short time period. After the completion of the remodeling works, application of proper maintenance is a

key to successful capacity enhancement.

(2) Human Capital Development (capacity building)

1) Short term

In addition to measures to reinforce the capacities of power generation facilities, preventive

maintenance of these facilities was considered important for the maintenance of their capacities and

the maintenance and improvement of their operational efficiency in this survey. It is necessary to train

maintenance engineers for the appropriate implementation of regular inspection as part of preventive

maintenance. A study will be conducted on the possibility of establishing an independent organization

specialized in the maintenance and repair of the facilities and using the human resource development

service of this organization as a measure to cope with the problems of the shortage of the maintenance

personnel and budget at the state-owned power generation facilities.

In general, the scarcity of skilled engineers undermines operational efficiency and lack of maintenance

of facilities. To cope with this problem, the survey team suggests a training facility with equipment

and materials which are actually used in power facilities, like a power plant silulator. While most of

the trainings are carried out in a traditional classroom setting in Bangladesh, the proposal puts an

emphasis on the practical exercises by using effective training materials. The proposed training has

two main courses, one of which is a course for plant operators, and the other is a course for

maintenance engineers. Both courses lead to certifications in the respective areas of the education. The

proposals include the facility and training items described below.

A further study will be required before deciding whether such training will be provided by an

independent organization to be established or by each power company.


Figure 2-9 Training Course Plan


Final Report

2-18

2) Mid/long term

The training courses should be extended to higher levels of education for instructors. In the short term,

instructors can be provided from other organizations; however, a scarcity of instructors will be the

biggest problem in the future. In order to fill the gap between training demands and instructors

provided, skilled workers at operating facilities can be utilized. A workforce rotation program should

be introduced to enable new employees to learn from the skilled workers who have experiences with

the actual equipment, while the career development plan for the instructors motivates them to take a

leave from their positions at their power facilities. The introduction of job rotation is recommended as

a measure to provide new employees with the opportunities both at power plants and at training

centers to learn the practical work performed in power plants from engineers who have ample practical

working experience.

(3) Thermal Power Plant O&M Information Management

1) Short term

After the completion of the development or enhancement works of power facilities, it is important to

maintain their capacity and efficiency. The objective of the organization-wide information

management system is to facilitate maintenance planning, budget control and procurement

optimization. The functions of the system include the following.

Maintenance Planning - To encourage plant managers to make feasible plans for maintenance.

Budget Management - For prompt decision making on financial matters and reduction/removal of

delay in maintenance activities.

Maintenance Work Management - To keep maintenance projects within budget and timeframes.

Failure History Management - To provide supporting data for budget and plans.

Expected results (Quantitative Effects) are:

Reduction of maintenance cost

Reduction of frequency of forced outage

Reduction of forced outage hours

In order to maximize the effectiveness of implementation of information management, a feasibility

study is expected to be carried out in pursuit of the following information items.

Table 2-1 Items Required in Feasibility Assessment

Category Item Details

Computer

System and

Network

Infrastructure

Plant LAN Local Area Network availability in power plants

Enterprise network Network availability, connectivity among business units and

multiple locations, and its security, reliability and capacity.

Data repository Data center location, storage capacity and scalability

Legacy systems

and data integration

Legacy systems and legacy data.

Management Business process Business processes in Maintenance Planning, Budget Creation,

Procurement, Work Planning, and their business requirements.

Regulations and

standards

Regulations, standards, public authority reporting guidelines.

Target

Selection

Facility

Requirement

Facility type/age/capacity, location, future plans for

enhancement or replacement

Connectivity between facility and data acquisition devices



Final Report

2-19

The Information Management System connects the head office with power facilities and other related

organizations such as Maintenance Center and Training Center. These organizations share facility

information for analytical use which brings the power facility higher efficiency and reliability based

on accumulation of historical data.


Figure 2-10 System Functions and Data Flows for a Power Plant in Bangladesh

2) Mid/long term

The scope of the Information Management System can be extended to Facility Management and

Environmental Management. The functions of the system may contain:

Facility Assessment - To optimize maintenance cost based on physical state of facilities.

Procurement Management - To maintain spare inventory levels while reducing procurement cost.

Tariff Management - To provide an accurate cost basis for appropriate pricing of electricity.

Environmental Management - To ensure regulatory compliance while managing environment

related cost.

Expected results (Quantitative Effects) are:

Reduction of Total Ownership Cost of facilities

Reduction of fuel cost

Reduction of emissions, effluents and waste products

Contribution to effective tariff setting

(4) Organization (capacity building)

1) Short term

To perform facility maintenance activities in compliance with laws and regulations, auditability of the

work processes and work results, such as facility inspection reports, must be achieved. Maintenance

crew must be familiar with the designated documentation and records, which need to be prepared in an

accurate and timely manner when requested by the authority.

The maintenance planning processes require some knowledge in project management. Maintenance

managers will be advised to learn work process management and budget control.

Apart from the above, the information assets need to be properly maintained and protected. IT/ICT


Final Report

2-20

engineers are expected to keep the system fully operational; therefore, IT/ICT education is also

important.

2) Mid/long term

As described in Chapter 19, the goal of this Study is to achieve a best practice in O&M in the power

sector. Major power producers in Japan make use of a wide variety of software applications in daily

operations of their facilities; however, their common focus is to maintain reliability of the facility with

optimal cost. In the future, the education for plant workers may cover wider area which is more

management oriented in terms of efficient use of organizational resources.

2.10 Tariff policy


1) Short term

For implementing appropriate tariff policy including electricity tariff increase and gas price increase,

capacity building for appropriate decision making of price level in consideration of accurate supply

cost is required. Therefore donors are expected to provide capacity building support for BERC. In fact,

ADB is considering to support BERC for capacity building. In addition, for grasping accurate supply

cost, support of capacity building for each organization to develop sophisticated management plan is

also important. Hence for enabling organizations such as BPDB to develop more sophisticated

management plan and implement it, donors should support corporate management capacity building in

them. Donors are expected to support BPDB, etc. to analyze financial situation in more detail, identify

inefficient points, and remedy them.

2) Mid/long term

Above-mentioned support is expected to be continued until appropriate tariff level and ideal financial

situation of BPDB, etc. are achieved.

2.11 Realization Of Low Energy Consumption Society

The target of energy projects in the developing countries is “stable supply of energy and electric power

that meets the increasing demand for energy for the economic growth.” Therefore, they will need

continuous power development. Meanwhile, the results of the analysis of the relationship between the

economic and social activities and energy consumption was used for the projection of energy demand

in the formulation of the supply plan in this master plan. The use of the technologies considered to be

highly reliable in 2016 was assumed in the formulation of the supply plan. However, the validity of

these assumptions is likely to change because the energy demand may not increase as projected and

more advanced power generation technologies may be developed in future. These changes will be

important factors to be investigated in the rolling monitoring of this master plan in future.

2.11.1 New Technologies for Power Generation with Different Energy Sources

The technological innovation in the energy and power sectors is advancing at a remarkable pace. A

technology in the research stage at the time of the formulation of this master plan may become

available for use in Bangladesh by 2041 with the progress of R&D in these sectors. The projects using

such new technologies are classified into the two groups mentioned below and explained in the

following.

(1) Energy Efficiency Project: EE

(2) Renewable Energy Project: RE

Table 2-2 Areas of research by type of energy


Final Report

2-21

EE

Projects for the improvement of energy efficiency (EE)

Power generation Power generation with the integrated coal gasification combined

cycle, etc.

Improvement and rehabilitation of

power generation facilities

Renewal of the facilities for the improvement of power generation

efficiency

Power transmission and

distribution

Establishment of power transmission and distribution facilities for

the improvement of energy efficiency

Activities for reducing power

transmission and distribution

losses

Renewal of the existing facilities for the improvement of energy

efficiency

Rural electrification

Conversion from the power generation with internal-combustion

engines to more energy-efficient power generation, transmission

and distribution facilities

Demand side management (DSM)

activities in the electric power

industry

Introduction of energy-saving systems for the reduction of power

consumption

ESCO activities Introduction of facilities and services for the improvement of

energy efficiency through the ESCO activities

Improvement of energy efficiency Research for the improvement of energy efficiency and the

development of energy-saving technologies

RE

Projects for power generation with renewable energy (RE)

Power generation activities

(use of renewable energy)

Implantation of power plants using solar, wind, hydro, and

geothermal energy and biofuel

Hybrid power generation activities Implantation of power plants that can be operated with both

renewable energy and conventional energy sources

Bio-energy activities Implantation of power plants using bioenergy including biomass,

biogas and biofuel for power generation

Decentralized Energy Production

& Distribution

Implantation of decentralized energy production systems using

renewable energy

Energy conservation Research on the energy conservation technology


2.11.2 New technologies in the electric power infrastructure sector

Table 2-3Areas of assistance in research in the electric power infrastructure sector

Classification Technology

Thermal power generation Integrated coal gasification combined cycle (IGCC) power generation

Renewable energy Biomass gasification power generation

Power generation using the methane gas generated by fermenting biomass

Power transmission and

transformation

Improvement of the power factor

Improvement of the power flow (increasing the number of transmission lines)

Increasing the diameter of power cables

Introduction of an upper level voltage (increasing the transmission voltage)

Superconducting cables

Superconducting transformers

Insulated strand cables

Use of low loss transmission cables


Final Report

2-22

Classification Technology

Power distribution

Distribution loss reduction technology (improvement of power factors:

reduction of lagging power factors)

Distribution loss reduction technology (low-loss distribution transformers, “Top

Runner Transformers”)

Distribution loss reduction technology (amorphous core transformers)

Distribution loss reduction technology (improvement of measuring equipment)

Distribution loss reduction technology (increasing the diameters of power

cables)

DSM

Heat pump technology (Heat pump hot water supply systems with CO2 natural

refrigerant)

Thermal storage air conditioning systems

Electric automobiles

Cogeneration systems (combined with thermoelectric systems)

Fuel cells (polymer electrolyte fuel cells: PEFCs)

Fuel cells (solid oxide fuel cells: SOFCs)

Energy conservation in

storage batteries

Power storage technology (load-levelling)

Energy conservation in battery cells

Superconducting magnetic energy storage system (SMES)


2.11.3 Responsible Energy Consumption and Development of Bangladesh into a “Developed

Country”

The record of energy consumption in Bangladesh in the past and the relationship between the

economic development and energy consumption in the countries in Southeast Asia, especially the

relationship in Thailand, in the past were used for the long-term projection of the energy demand in

Bangladesh in the formulation of this master plan.

There is no doubt that Bangladesh has to develop its economy further in future. On the other hand, it is

required to achieve the economic growth while saving the energy consumption (or, to achieve both

development and environmental conservation simultaneously). In the formulation of this master plan,

the 3E evaluation, more specifically, an analysis using the CO2 emission as a variable, of the power

development plan was used for the quantitative evaluation of its commitment to the environmental

conservation. If the environmental regulations in the international community become stricter and

more diversified, Bangladesh will have to endeavor to comply with them as a responsible member.

In addition, a “developed country” in 2041 may not be a large energy consumer like the developed

countries at present in 2016. Large energy demand has already been a condition for a developed

countrysation in the past. In fact, as mentioned in Chapter 5, the per capita energy consumption of

Bangladesh is smaller than those of Thailand, Indonesia and Vietnam. Meanwhile, the differences in

the per capita energy consumption between Bangladesh and the three countries are larger than the

difference in the per capita energy consumption per GDP between them. This observation indicates

that Bangladesh consumes a smaller amount of energy than the other three countries to create the same

economic value and that the economy in Bangladesh has grown with relatively small energy input.

Although the changes in the industrial structure expected in future are predicted to increase the energy

demand rapidly, Bangladesh can be proud of its more energy-efficient economic growth than the other

Asian countries.

Furthermore, the government and the people of Bangladesh to develop their country into a developed

country is to create an image of a “developed country” in 2041 including the scale of economy and the

lifestyle of people that they aim at, prepare an ideal way to use energy resource for economic

development that is efficient and energy-saving in the way like they have, as mentioned above, by

themselves and realize the ideal way in a responsible manner.

power system master plan 2016 - think blue data

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